Sauce is an action word that describes when someone has just taken a sip of a beverage and a friend makes them laugh at that exact same moment and the beverage is then spit back out creating a very fine spittle sauce. This usually happens while friends are enjoying food at a table; thus the term 'sauce'.
Aimee was telling me the funniest story about something that happened to her while she was on holiday right when I took a fresh sip of my mojito; I sauced all over the table!