David Smith, 18, was brought before Magistrate Andrew Eckhold for being armed with intent to commit an indictable offence, having custody of a knife in a public place, damaging property, stalking and intimidating and intentionally throwing an object at a vehicle.

Prosecution facts tendered to the court said the taxi was returning to Dubbo's central business district at 10.12am when four figures holding hands obstructed traffic in the west-bound lane of Myall Street.

As the taxi slowed Smith threw a bottle in a brown paper bag directly at the windscreen.

The driver stopped and asked Smith "Why did you do that mate?"

Smith responded by yelling "----off you white ----" and threatened the driver with a 20cm knife.

Smith walked around to the passenger side of the vehicle and jabbed the blade at the cracked windscreen.

The driver contacted police as Smith circled the taxi.

Fearing another incident was imminent the driver moved along Hume Street into Douglas Mawson Road to wait for police.

When officers arrived Smith still hand the knife in his right hand.

Magistrate Eckhold said Smith had been involved in a really serious offence against the taxi driver.

"You are only 18," the magistrate said.

"Your guilty plea may save you from full-time jail."

A solicitor from the Aboriginal Legal Service said the court would be assisted by a pre-sentence report.

The charges were adjourned to December 17.

Bail was continued.