Jurors were shown the crudely-drawn image sent by Mark Jones, who is accused of belonging to the banned far-right organisation National Action.
The far right-wing group was banned by the Government on December 16, 2016, following the murder of MP Jo Cox.
Previous evidence: Neo-Nazi terror suspect won Miss Hitler contest, court told
A court heard Jones sent the image along with other offensive material via the Telegram online messaging service nine months after the group was banned.
Jones, 24, of Halifax, West Yorkshire, denies belonging to a proscribed organisation along with partner Alice Cutter, 22, of the same address, Garry Jack, 23, of Shard End, Birmingham, and Connor Scothern, 18, of Nottingham.
The court previously heard Cutter entered a Miss Hitler beauty contest organised by National Action, billing herself “Buchenwald Princess” after the German concentration camp where thousands of Jews were slaughtered during the Second World War.
Prosecutor Barnaby Jameson QC said: “On September 5, 2017 from 8.51pm, Jones started deleting a number of files that were plainly incriminating: ‘when are the Nazis arriving’,‘Counter-extremism strategy’ and ‘Pictures National Action UK’.
“What was Jones worried about, or is the answer obvious?
“On September 11, 2017, an image was sent by Mark Jones in Telegram and appears to depict the Prophet Muhammed [being anally raped by a pig].
“On September 13, 2017, an image of Jones holding a knife finds its way onto the mobiles of Jones and Cutter.
“On September 14, 2017, Nathan Pryke [who has admitted National Action membership] sent a Wire message to Scothern. ‘I feel like a noose is tightening round my neck.’
“What is crumbling is the last remnant of National Action who flouted the ban.
“On September 17, 2017 a familiar National Action image appears on the Cutter’s mobile. It shows a skull wearing a Second World War German helmet with the National Action logo.
“We ask the question, why those images and why Cutter’s mobile?
“The same day further ‘artwork’ appears on Jones’ mobile at 11.09am showing further offensive Klan material.
“Was this carried out by Jones? And what does it tell us about Jones’ mindset?
“Why the obsession with knives?
“On September 27, 2017, the police made their first of two searches of the Cutter-Jones address in Sowerby Bridge, west Yorkshire."
The trial, at Birmingham Crown Court, continues.