Green’s Dictionary of Slang

1. (US campus) an unpopular student [HDAS, citing Weseen, Dict. of American Sl. (1934), suggests that this may be a mis-reading, but it may equally be be a separate or fig./ext. use of sense 2].

1927		M.C. McPhee ‘College Sl.’ in AS III:2 132: His inferiority is further emphasized when he is called: ‘a de-rail,’ ‘a dumb-bell,’ ‘a dumb-rock,’ ‘a jelly-bean,’ ‘a sissy,’ ‘a rookie,’ or ‘a woozy upstart’.
1934		Weseen Dict. Amer. Sl. 179: [College] Derail – A person disliked.

2. (US/N.Z.) denatured or adulterated alcohol, as drunk by alcoholics, tramps etc.

1930		G. Milburn ‘The Moocher’ in Hobo’s Hornbook 224: ‘Too bad,’ thought he, ‘that birds like him / Must stand out in the cold, / So full of derail hooch and all / The dingbat stuff that’s sold.
1940		E.F. Frazier Negro Youth 16: [B]ootleg liquor known as ‘mammy,’ ‘splo,’ and ‘derail’ is sold in the dens of vice to which men go for all types of sexual pleasures.
1956		N. Algren Walk on the Wild Side 101: They’re going to make out five or six phony orders [...] then go drink derail in Lafayette Square.
1991		(con. 1920s) O.D. Brooks Legs 99: The gnasher was now cursing, either from a nightmare or too much derail.

3. a person who becomes ill through drinking such liquor.

1935

E. Anderson Hungry Men 261: If I couldn’t whip a derail like him, I’d kiss anything you say.