If you have heard it recently, it's a progression from "That's lit". It has the same meaning (=great, awesome) but some speakers replace their own slang to seem "up to date". The same thing happened with "That's sick" (=awesome), which was soon replaced by "That's ill". Slang can have a VERY short shelf life!

If you hear someone saying "That's fire" it means "that's hot" - a slang term for saying something is really good.

Hi FrankieLi, It's urban slang. https://www.urbandictionary.com/define.php?term=Thats%20Fire. Have a great day, Stephen

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