The Kentucky Plug is used to reference Kentucky Ballistics (Scott) after his freak accident with 50-BMG rifle exploding. His jugular vein was lacerated and bleeding out. Though with quick thinking, he stuck his thumb in it, potentially what may have kept him from dying.
The Brandon Herrera in a Gun Meme Review, going through memes of his friend's freak accident, came across of people decided to name the moment of thumbing when Scott was bleeding out, as the "Kentucky Plug".
This words is used when an orifice is leaking a lot of fluids, and sticking a thumb in it.
John: How did it go with that girl you brought back last night from the bar?
Kyle: She was a sprayer, I had to use the Kentucky Plug on her!