(1) To make a repair during normal operation. It often refers to marking sectors in poor condition as bad and remapping the data to spare sectors. Some SCSI drives can automatically move the data in sectors that are becoming hard to read to spare sectors without the user, operating system or even the SCSI host adapter being aware of it. See hot swap.
(2) Microsoft's term for a bug fix, which is accomplished by replacing one or more existing files (typically DLLs) in the operating system or application with revised versions. See QFE.