Characters
Ooooh! Burn! That’s a burn about a burn! That’s a 2nd degree burn!
— Michael Kelso • That '70s Show

Behind the line May contain spoilers.
Our reading
An editorial interpretation.
The speaker celebrates an insult by extending the double meaning of “burn”. A joke about a previous joke becomes a second-degree burn, borrowing the language of physical injury to rank verbal damage. The excited repetition makes the celebration itself part of the comedy.
Context reviewed