A sleeping homeless man pulled out a knife when council workers powered up a street cleaning machine, a court heard.
Lyndon Wilson was disturbed as he snoozed in the doorway of the British Heart Foundation shop, in Long Row West, Nottingham city centre, on July 9 last year.
Nottingham Crown Court heard the water jet washer had a loud generator.
One of the workers saw Wilson, 48, of Finchley Road, Anfield, Liverpool, become agitated.
The employee attempted to explained what happened with the washer, but Wilson did not listen, Nottingham Crown Court was told.
He walked some distance away, rifled through a bag and got out a kitchen knife with an eight-inch blade.
Wilson threatened the worker and said "if it happens again, I will stab you in the neck".
Wilson already has 37 convictions for 88 offences and two of those involved knives.
One happened in Merseyside when he had an argument with his wife and left the house with a kitchen knife.
The second was in Liverpool when he produced a knife outside a bar and a member of the public called police.
Matthew Hayes, representing Wilson, said at the time of the latest offences his client had significant mental health issues and health issues.
"He says the jet washer sprayed his sleeping bag which woke him up," said Mr Hayes. "It wasn't the noise of the generator".
He also said Wilson put the knife away after a couple of seconds.
"His case is there was absolutely no intention to use the knife towards them," he added.
He also stressed the offences were over a year ago and it was six months before Wilson was prosecuted - when a postal requisition order was sent.
A warrant had been issued in Nottingham in the meantime. Wilson separately appeared at West Yorkshire Magistrates' Court and received 28 days for unrelated common assault and harassment offences.
"No one picks up on this warrant," said Mr Hayes. "He serves 14 days in custody. On March 8 he resumed life in Liverpool and is arrested on June 6".
Once before the courts, Wilson pleaded guilty to using threatening behaviour and possessing the knife in Nottingham. He has since been addressing his drug issues.
Mr Hayes said progress had been made and there had been dramatic changes in the life of "the man who was living in the doorway of the British Heart Foundation".
After hearing more about the case, Judge Sally Hancox asked for a pre-sentence report from probation and will sentence Wilson on October 11.
