Either short for "fucking ugly" or "fantastically ugly". Denotes an extreme, and unchangable state of pure fug.This is ugliness beyond repair, where there is no cure. It can refer to a person's face, or their clothing, or anything heinously unnattractive. Used in an insulting and demeaning way.
Man, that girl is fugly
Oh, look, there's Fuglooking particularly heinous What a fugly coat