Hey guys, thanks for the responses.
After doing a bit of reseach, I found that the Bologna (google it) phenomenon explains this very well. A Bologna bottle can be use to hammer a nail into a tree, but as soon as even a small crack develops INSIDE the bottle (normally created by droping any sharpish object inside the bottle) it shatters immediately.
I beleive the bottle was treated to create this affect. He most probably spat something transparent into the bottle, notice you can hear him blowing air over the bottle instead of applying a pressure difference. I beleive he does this to build up air velocity to spit the object faster (try to spit something into a bottle without doing this, its hard to spit with any force at all).
It seems this "trick" get sold for $99 as goes by the name "the devil's bottle", magicians really swindle each other don't they?
For those who don't wanna google it, it simply works by queching the inside of the bottle, while allowing the outside to cool much more slowly, and then annealing the outside to make it even more crack resistant. The quenched inside will then shatter apart even for almost microscopic cracks due to the large residual stresses from the rapid cooling process.