When something is so horrible it's hilarious.
Anna: Did you hear about Steve?
Kate: No...
Anna: He got fired on his second day out of training for being drunk. Isn't that horlarious?!
When something is horrible and hilarious at the same time
Person 1: Hey have you seen this meme?
Person 2: That's horlarious
Something that is simultaneously horrible and hilarious. Often used to refer to funny but offensive jokes or bad puns.
"Did you see that commercial with the Arab guys in the car that's too tough for the bomb? That was horlarious."