Used on internet forums when one takes it upon oneself to edit or correct somebody's words/images/material/whatever, usually with comical results.
Guy: Hey man, look at this cool Ed Hardy hat I bought!
Other guy: lmftfy... "Hey man, look at thisdouchebag hat I wasted my money on! I'm gonna wear it while I f*** my cousin!"
Text convo:
Person1 - Hey did you know shadman forgot his bait in the freezer?
Fitness guru - LMFBFO. I guess the only thing he will be catching is a cold
Person1 - Lolski