It comes from the Spanish pragmatism "Me la follo". In English "I want to fuck that girl" or "I like to have wild sex with this girl, but i am the forever alone guy"... more or less.
AMIGO - Mira esa tía!...
TÚ - Esta buenísima, MELAFO!
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DUDE - Hey man, look at that girl!...
YOU - She's so good, MELAFO!