here is what i think happened:
he liked you
he asked you out
he believes you turned him down because you don't like him
because he believes that, he messed with your friend to make you jealous

what you should do:

if you are the type who doesnt get mad:
find a day when you can go to the movies and ask him if he stills wants to go and tell him that the last time was because you already had something planned

or

if you are mad:
get him alone or call him and say something like "why would you ask me out and then go and flirt with my friend the same day!?!?!? what did you change your mind about wanting to go out with me? because i used to really like you but after you got my hopes and then killed them im not sure if i do anymore

or

you just wanna get back at him:
flirt with a guy with him right there just like he did with your friend when you were there

He is trying to make you jealous. I think he like you and the only way he thinks he will get you is if he makes you jealous (he is using his flirting talents).