Sometimes a simple FUCK YOU isn't enough. In the most violent fits of verbal rage things like morals, ideals, and at times even sexual preference get thrown aside to make room for the worst insult possible.
A man telling another man that he will fuck him faggot is quite possibly the end all to insults. Just the thought of being fucked up your asshole until you start liking it is enough to make most men tuck their dicks between their legs and abandon the argument or beef.
Can also be used like:
He fucked me faggot, I got fucked faggot, did you hear about the guy Jim fucked? He's faggot now.
Dick: "I had a good time fucking your wife"
Peter: "I'll fuck you faggot."
Dick: "Wow, you're gay? Why are you married then?"
Peter: "I'm not gay motherfucker, and to prove it I'll fuck you on your back so you can see in my face how much I'm not enjoying it."