From AMLopedia
kelly humped his hat was an old school catchphrase developed about 1998. It came from Adam's copy of Microsoft Bob. Adam liked to use Microsoft Bob to write different stories about his classmates. He used small font sizes to hide secret messages in his stories. One of his sentences went like this: "For a secret message, resize the font below." When one resized it, it became clear that the phrase was "kelly humped his hat". This referred to Kelly Woods, a compulsive liar that went to elementary school with Adam.