The word "flaugh" comes from two words. The first being "flaunt" and the second being "laugh". The combination of these two words is used to show great joy and, instead of laughing only to one's self, laugh out loud (lol) in a flaunting manner. Most of the time the word is pronounced as "floff", but only when said with a German accent. It can also be said as "flaugh", but that's just not cool.
Dude: Remember when that girl got wasted last night and was totally throwing up onto Guy's couch?
Chick: Yeah. Why?
Dude: I definitely FOL'd.
Dude: You know,... Like FMAO?
Dude: I Flaughed Out Loud... It's exactly like Flaughing My Ass Off.
Chick: What the fuck are you talking about?