Spike: Got to hand it to you, Goldilocks, you have bleedin' tragic taste
in men. I have a cousin, married a regurgitating Frovlax demon, has better instincts than you.
Wait, what now? Spike has a cousin? Let's look at the possibilities here:
1. Spike has a human cousin who happens to be married to a Frovlax demon. Except it would to be a cousin several times removed, because presumably all Spike's first cousins are dead now.
2. Spike had a human cousin who is now a vampire and married to a Frovlax demon. Quite a coincidence, that, multiple members of the Pratt family getting turned independently of one another...
3. Spike has a vampiric cousin, ie, someone turned by someone sired by his grandsire, AKA Angel. So... Penn? Or Lawson? And this vampiric cousin is married to a Frovlax demon. We've never heard anyone other than Dru describe vampire relationships in human terms, have we?
Frankly, even ignoring Spike's backstory from FFL on, which the writers presumably didn't know yet, none of these sound particularly plausible to me. I think I'm going to have to go with:
4. Spike is engaging in typical Spikean hyperbole. Alas, because the idea of Spike having a cousin in demon circles raises interesting possibilities.