Buddy does that aswell, he seems to do it when he wants to find somewhere nice to curl up and go to sleep, he sort of digs and goes round in circles all at the same time
He makes me laugh if he does it on our bed at night, he's laying on our cover thats filled with goose down, as if its not soft enough for him!!!
When he does it on the sofa i just say 'oi pack it up'! it works, he stops. lol