'Disco rice' is American hospitality-industry slang — used by restaurant and bar workers — for maggots, particularly the ones found in dumpsters or rotting food. The grim humour helps staff cope with the unpleasant reality of cleaning food-service waste. If your teenage child uses the phrase they may be working in a kitchen or bar, or may have picked it up from food-industry TikTokers. It is unlikely to come up in any other context. Crude but not coded for anything sinister — it is occupational slang of the same family as 'doctor speak' or 'cop slang'.