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A ghetto/black slang word used when referring to a friend. Much like the way surfers use the word "dude" entirely too often, "cuddy" can be used by black people (typically those that listen to rap) and wiggers upwards of 6 times per sentence. As dawg was the popular word for blacks to use in the 1990's, cuddy is the word they use in the early 2000's.
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