Stands for "over-the-knee spanking." It comes from a subculture known as BDSM, SM, or S&M. It is usually used by a Dom/Domme to punish a sub (or, depending on which way you look at it, arouse a sub). Pretty much self-explanitory; a spanking given while the sub flipped over the Dom's knee, much like you would spank a child.
sub: "N-n-no Sir!"
Dom: "What? 'No, Sir?' --get over here for an OTK!"