In video and computer games spawn is the reforming or appearance of a player somewhere in the game level. In FPS games, when a character is fraggedthe game is not over, but rather the character spawns in one of several set locations in the map and continues playing. Usually when a character spawns after a frag they no longer have any items and special abilities they had before being fragged.
Also see All About Multiplayer PC Gaming in Webopedia’s “Did You Know…?” section.