Comes from the MC Hammer song but is now commonly used for when someone says something annoying and you want to express your anger with someone you know.
It now means to beat someone to death with a hammer. Lovely
Danny: I get £10,000 when i'm 18 so upset I have to wait, damit!
Jonzy: *To Dave* HammerTime! *With fist action of smashing down Danny with a hammer*