Short for delusional.
Definition of delusional: "characterized by or holding false beliefs or judgements about external reality that are held despite incontrovertible evidence to the contrary, typically as a symptom of a mental condition."
Person one: Omg, he looked at me! I think he loves me!
Person two: Don't you think you're being a bit delulu right now??
Person one: Yeah, you might be right... I am a bit delulu