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Taken literally, it is the merge of the two words Beaver and Schwanz.
Beaver, meaning "the pudenda of a woman"...and Schwanz meaning "male organ of copulation".

In an abstract way it could be like the Chinese dualistic philosophy of yin and yang.
This could be a way to describe a She-Male's private parts:

"Hey dude, check out his-her sexy Beav-Schwanz."


"This man-woman is suffering from Beav-Schwanz Envy"

Abstract Example:

"He/She's like my yin to my yang, my 6 to my 9, my Beav-Schwanz..."
by Brett "moleman" Molitor March 15, 2004