1275–1325; Middle English dudde; perhaps akin to Low German dudel coarse sackcloth

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a device, person, or enterprise that proves to be a failure.
a shell or missile that fails to explode after being fired.

1815–25; special use of dud, singular of duds

1. fiasco, debacle, fizzle, miscarriage.
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Based on the Random House Dictionary, © Random House, Inc. 2014.
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World English Dictionary
dud (dʌd)
1.  a person or thing that proves ineffectual or a failure
2.  a shell, etc, that fails to explode
3.  old-fashioned (plural) clothes or other personal belongings
4.  failing in its purpose or function: a dud cheque
[C15 (in the sense: an article of clothing, a thing, used disparagingly): of unknown origin]

Collins English Dictionary - Complete & Unabridged 10th Edition
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Word Origin & History

c.1825, "person in ragged clothing," from duds (q.v.). Sense extended by 1897 to "counterfeit thing," and 1908 to "useless, inefficient person or thing." This led naturally in WWI to "shell which fails to explode," and thence to "expensive failure."

c.1300, dudde "cloak, mantle," later in plural, "ragged clothing" (1560s), of uncertain origin.
Online Etymology Dictionary, © 2010 Douglas Harper
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Example sentences
My new duds were sewn from old bolts of cloth, so they cost a fortune.
He was one of the brighter products of the coup system, otherwise notable for
  its duds.
We cannot judge its performance solely by the duds that it produces.
With high interest rates and inflation a number of these deals may turn out to
  be duds.
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