1931, American English, perhaps a shortening of morphadike, dialectal garbling of hermaphrodite; but bulldyker "engage in lesbian activities" is attested from 1921. A source from 1896 lists dyke as slang for "the vulva," and Farmer & Henley (1893) has "hedge on the dyke" for "the female pubic hair."
[T]he word appears first in the long forms, bulldiker and bulldyking, both used in the 1920s by American blacks. No African antecedents have been found for the term, however, which leads to the possibility that this is basically just another backcountry, barnyard word, perhaps a combination of BULL and DICK. [Rawson]