This is a term used in live multi-table poker tournaments (MTTs). It describes a deal made between a ridiculously high number of remaining players in an MTT. This form of deal (aka "chop") is particularly popular in Dundee in the UK hence the name Dundee Chop. However, a Dundee Chop can take place in any poker tournament in the World. Anyone who takes part in a Dundee Chop should be ashamed of themselves for not having the balls to carry on in the tournament.
Say 40 players entered a live multi-table poker touranament. Normally you might expect the players to play it out to a winner or agree a deal (sometimes known as a "chop") when short-handed (about 6 players or less). However, a "Dundee Chop" occurs when there are a ridiculous number of players still left in the tournament (relative to the starting field). Say in a 40 player tournment the last 10 players agree to chop the prize pool evenly - that is definitely a Dundee Chop. Another famous incidence of a Dundee Chop occurred in Edinburgh in 2009 when 18 (eighteen) players chopped a tournament at the Gala Maybury Casino.