Holmium has one of the highest known magnetic moments (10.6uB) of any naturally occurring element. Because of this it is imperative to create the highest known man-made magnetic fields.
This magnetic moments are critical in Yttrium-Iron-Garnet (YIG) lasers for microwave equipment.
Holmium is a critical component in solid state laser materials such as Yttrium-Aluminum-Garnet (Ho:YAG) and Yttrium-Lanthanum-Fluoride (Ho:YLF), it emit at 2.08 microns where a human eye safe region in the spectrum. This allows its use in a variety of medical and dental applications.
Holmium is also one of the yellow or red colorants used for cubic zirconia and glasses.