A complement to a girl from another girl, in a non-homosexual way. When a girl calls another girl "cute" she's basically saying that they're sweet, nice, or used to refer to something little, or related to being young.
(People do this in my school, it's kind of a southern thing!)
Friend one: "You look so Cute(Complement) today, Your dress and hair is, like, adorable."
Friend two: "Thanks!"