Anyone who went to college before 1999 knows that "phugly" and "fugly" refer to one thing and one thing only. In the vernacular - and yes, this is crude slang (but this IS web site devoted to 'urban' and not necessarily to 'urbane' language usage)- the word "phugly/fugly" was coined as a contraction of the phrase "fucking ugly." Sorry, "phat" was never part of the equation.
1) "No doubt about it, that was one phugly dude."
2) "I don't know how to tell you this, honey, but your new outfit is... phugly."
Said in place of "fuck" for a variety of reasons. These include, but are not expressly limited to: Amusement, inside speak, put-downs, observation, and generalized phobia of using cuss words. See also: kerpiddilyphumphsk
When you are making nookie with a particularly large person and find within his/her rolls of fat an Item of food which has been stored for a indefinite amount of time ... and consume it or feed it to him/her.