To cast magic spells
Merlin's Magic Staff was a great asset in casting magic spells, as long as the user knew how to control it properly. When Merlin was about to leave for to attend a Wizard's convention, he told his apprentice Fuddy to keep his hands of the staff because Fuddy had not learned full mastery of it. But Fuddy thought it a good opportunity to hone his staffing skills and disobeyed Merlin's order.
The first thing Fuddy conjured up with the Magic Staff was a purple monster. But before he could do anything to remedy this situation, Fuddy was kidnapped by Haunter and Scared Stiff, who mistook him for Merling the magician. Still clutching the Magic Staff, Fuddy was taken to Hauntquarters. Prime Evil immediately identified Fuddy as being a minor apprentice instead of the great Merlin himself, and threw him into his most well secluded cell. However, Prime Evil neglected to take the Magic Staff from Fuddy.
When Fuddy found himself confronted with a Ghost Rat in Prime Evil's dungeon, he used the Staff on him 'to take care of him'. However, the spell only served to increase the Rat's size. Eventually the Ghostbusters released Fuddy from his prison cell, and when confronting Prime Evil, Fuddy used the staff against the evil ghost, resulting in Prime Evil being engulved by tiny stars and suffering from a momentary lapse in power. Prime Evil soon recovered however and cast a spell of his own, which was deflected by Merlin himself who made a sudden appearance in the middle of the battle scene. Merlin took the Magic Staff from Fuddy and used it to send Prime Evil flying out of Hauntquarters.
Merlin allowed Fuddy to use the Magic Staff again as soon as they got home. Having turned the staff into an ordinary looking broom, Merlin ordered Fuddy to clean up the mess he made.
The Magic Staff was first used in the episode Our Buddy Fuddy.