The first thing that you should do is to tell someone about it. You can tell a teacher, a parent or a friend so as to alleviate the suffering. Also you should encourage your friend to do something about it like talk to a counselor or teacher to help him out with his situation as violence will not solve anything.
I don't really understand this bully thing nowadays. there has been bullies since the fifties. there are a few answers here, first is do nothing and keep being afraid to go to school everyday, second would be to stand up for yourself, third is get some adults involved, fourth is my favorite option yet.....get a bunch of the kids that the bully is picking on together and confront him that way...... I'm NOT saying you should all beat him up but let him know that you are all sick of him and none of you are going to take it anymore......and if he's stupid enough to try to fight all of you at once...... well then he'll get what he deserves. Stop Bullying.