to be surrounded by or in the middle of such poor circumstances that one's only option is to laugh or exclaim truly how fucked you are;
or to be so inebriated that your drunkenness is considered an art form because of its inherent extremity
Dude 1: Dude, I wrecked my dad's car last night.
Dude 2: Wow dude. You're fucked aren't you?
Dude 1: No man, the cops found three thirty packs of stones in the back too. Haha, I'm straight discofucked.
John: Hey Pat, did you see Josh last night?
Pat: Yah, it was crazy! He took a dump on someone's lawn and started crying. He was so discofucked.