Nitrogen in steel forms nitrides by combining other elements that make up the steel, including molybdenum, tungsten, vanadium and even aluminum (aluminum is one of the strongest nitride formers).
Nitrides are similar to but separate from carbides (which are carbon combined with other elements of the steel). Both carbides and nitrides increase wear resistance, but nitrides are generally harder (and more effective) than carbides.
To answer your question, nitrogen is not used for forming carbides, but for forming nitrides, which consist of nitrogen combined with other elements.
There are basically 3 common ways that nitrogen is used in steels.
The first is mixed informally throughout the steel. For this the nitrogen must be introduced with the steel in a molten state, typically in an AOD furnace. This is how nitrogen-strengthened austenenitic stainless steel is made. The nitrogen-strengthened steels (as there name suggests), use nitrogen not so much for forming nitrides but for increasing strength.
The second is as form of casehardening (nitriding). Nitriding is essentially a surface treatment the combines nitrogen with the steel on the surface and a little under the surface, forming a hard nitrided case. Typically the nitrogen is introduced to the steel in a muffle furnace at 900-1000 degrees F (480-540 C), in the form of ammonia gas which dissociates into nitrogen and hydrogen. The free nitrogen readily reacts with the elements in the steel forming nitrides. The depth of case is dependant on the time spent in the furnace, for instance a depth of about 0.010 is obtainable after 18 hours, and a depth of about 0.030 after 90 hours.
The third is a coating (or surface treatment with little penetration below the surface). Buck for example uses zirconium nitride for their Ionfusion blades.
A disadvantage of both nitriding and coating, is that you need to use an edge that is sharpened on one side only, to keep the nitrides from being removed during sharpening.
-Frank