A (not so) subtle allusion to male ejaculate. Inspired by episodes of popular MTV show "Cribs" where every male celebrity's bedroom would be introduced as "where the magic happens." The word may technically be used in any sense, but is best employed ironically or else the speaker risks appearing sleazy.
"And this is my bathroom hamper, where the magic gets washed out. I find that a very weak bleach solution is particularly effective at removing magic."
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