Two magnetic hole events observed by Polar on 20 May 1996 when it was in the polar cap/polar cusp boundary layer are studied. Low-frequency waves, consisting of nonlinear Alfvén waves and large amplitude (±14nT peak-to-peak) obliquely propagating proton cyclotron waves (with frequency f~0.6 to 0.7 f_cp), accompanied by electric bipolar pulses (electron holes) and electron heating have been observed located within magnetic holes. It is shown that low-frequency waves can provide free energy to drive some high frequency instabilities which saturate by trapping electrons, thus, leading to the generation of electron holes.