It's an acronym for Delete your Facebook. The proper use for dyfb is when one says something that you find offensive or just flat out dumb one would respond with dyfb or delete your facebook.
It works on many levels due to the fact that facebook is such a social norm that without one you basically do no exist. It's almost like telling someone to shutup or to go die.
Boy 1: I just tripped up the stairs
Boy 2: dyfb
Girl 1: I'm so in love with my boyfriend!
Girl 2: It's been like two weeks, just dyfb.