It means "Designated Ugly Fat
Friend". They don't have to be any of those, but that doesn't
mean they don't have friends more
attractive than them. The DUFF is basically the least attractive one in the group.
"She's cute, but her friends are hotter. She must be the DUFF."
"He's the youngest in the team and acts as the Gatekeeper to the
rest of the team. He's a DUFF."
"That
teacher is being left out from other conversations... He's a
teacher DUFF."