This term stems from the word deuchebag and refers to people from Ann Arbor who think that Ann Arbor is the greatest city in the whole world and always talk about how great it is and how they loved growing up there and that everything in their city is better than everything in your city.
Almost everyone you will meet that grew up in Ann Arbor is a deucebag.
Someone that calls a significant pre-flop raise in Texas Hold'empoker with a deuce in their hand, calls the hand all the way down to the river and sucks out at showdown. Note: Pocket deuces doesn't qualify for deucebag status.
"The hand was raised six times the big blind before the flop and that deucebag called me all the way down to the river with a two of clubs in his hand and sucked out a flush."