When you are taking a power shit from eating too much mexican food and all of a sudden you have the urge to throw up as well. You then proceed to stand up in the middle of your shit, turn around and heave your guts into your spicy shit soup. Named for the famous "two steps" it takes to turn around and the "Mexican" origin of the shit/puke.
Guy 1: "Hey! What'd you end up doing last night? I didn't see you after we went out for dinner at Pedro's."
Guy 2: "Ya sorry man, I had a terrible case of Mexican two-step last night. Those Enchiladas really messed my shit up."