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["Alan MacHett" <machett AT ibiblio.org>]

hmmm...  for such an educated bunch, I'm surprised I have to point this out.

I'm guessing your friend meant 'nazi' rather than 'Nazi'.  Nazi, like the
other "N-word" (Waazzuuuuup!) has meandered its way into common parlance
<aside>however, nazi definitely has not acquired a positive use, whereas
the modern variation of the racial epithet [nigga] has been reacquired by
a culture and turned into something positive, roughly meaning homey, peep,
friend</aside>.  The modern, slang use of nazi has various meanings,
anything from strict or conservative, to oppressive, to narrow-minded, to
militant, and so forth.  Think of the "soup nazi" from the show Seinfeld,
or the terms feminazi or grammar nazi.  The term 'nazi' doesn't carry
anything near the same weight it had decades ago.  Reconsider your
friend's statement in that light.

-Alan, a descriptive grammarian