When something or someone is extremely hard to look at. Very unattractive. So much so, you tend to say that's 'fucking ugly', so the 2 words are combined to make FUGLY.
KIM: Damn Gina, look at his face.... Gina: that's a face only a mother could love. Kim: he's just Fugly.
Dan: wow this house is dilapidated Josh. Josh: it'll be hard to sell this FUGLY looking piece of work.