Have you ever seen Pete Townsend destroy one of his guitars on stage after a performance? Probably not. He would hold the neck and smash the body onto the stage or the amplifier. It looked like he was swinging an axe. A guitar looks a little bit like an axe, don't you agree? The word "axe" feels a little dangerous. It can cut you, it can hurt people, you have to trust the people who are using them. So now do you see why some people refer to their guitars as an axe? A classical guitarist in an orchestra isn't playing an "axe", he's just playing a guitar. That slang name is reserved for rock and roll players who have a certain counter-culture attitude. To "shred" something is to tear it up into many pieces. When you shred, you destroy. So again this theme of destruction comes up. To "shred an axe" means to play the guitar in a fast and furious way without regard to the rules, you shred the rules! You play freely, you dominate the guitar, you shred the sheet music and the expectations of the audience. All this feeling is summed up in the phrase "shred the axe".

Yes, an "axe" is slang for guitar, don't ask me why. Shredding is a style of very fast playing. Unless there is other information available the speaker cannot know if the owner actually shreds so he probably just means "play the guitar". He may even been trying to sound cool and in the know by using this slang. No guitars were damaged here. added: on the axe theme, skilled guitarists are said to have "chops"

The term "shred" means a specific type of playing guitar (Yngwie Malmsteen, Paul Gilbert, to name a few.) The terrace means a specific electric body type, namely that of fender Strstocaster (I'm not 100% sure, it could be another body type.) Source: Guitarist and teacher for over 7 years.