Similar to "shake that bear," it means to engage in some sort of sexual activity that is up to the listener's and speaker's interpretation.
To say you "nabbed that biscuit" implies that you got what you were looking for, e.g. pussy.
It can also be used as a powerful statement of encouragement equivalent to "man up" or "get it, get it."
Guy 1: Yo bro, what'd you and that slampiece end up doing last night?
Guy 2: Boy you know I nabbed that biscuit.
Guy 1: Stop being such a fucking pillowbiter and nab that biscuit!
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