Fratfag has various definitions depending on usage:
<i>n.</i>: Self-explanatory; it's a fraternity member who is gay (yes, they exist).
<i>adj.</i>: The (usually unintentional) melding of fraternity culture with something blatantly homosexual.
The sentence, "Dude, you're like, electric on the dance floor," could be an example of fratfag speech: the patois of fraternity speech makes any possible innuendo blatantly obvious to the listener. Note that delivery and dialect play a role; it's the equivalent of a sibilant lisp. Also to be noticed is that fratfag activities (sometimes called fratfaggery) increases exponentially with BAC percentages.
"Mike is a total fratfag; the Kappa Taus are cool with it as long as he doesn't make grossed-out faces during the coed volleyball game."
"Nah man, I didn't mean I 'love' you in a fratfag way."