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a British adaptation of the American slang term, "the shit," used in reference to something that is superb, outstanding, amazing, or the best of its general category.

Eli Roth (Hostel, Cabin Fever) popularised the term in his short animated series, "The Rotten Fruit."
Have you seen the new Shelby Mustang? it's the real dog's bullet.
by Wild Drunken Bill March 25, 2007