An alcoholic beverage consumed as a hangover rememdy. The phrase comes from the expression "hair of the dog that bit you", meaning that the best cure for what ails you is to have some more of it. In ancient times it was literally used to say that if a dog were to bite you, putting the dog's hair into the wound would heal it. "Like cures like". This hangover remedy is not recommended because a) it leads to a bad habit of drinking during the day and b)it doesn't really work very well. Still, this method works about as well as most other hangover remedies.
Steve: Man, I'm really paying for all those keg stands I did last night.
Tony: Yeah, I'm hurting too. Hair of the dog?
Steve: Why not, man. We got a few beers left in the fridge.