1. What one is in when hacking, of course.
2. More specifically, a Zen-like state of total focus on The Problem that may be achieved when one is hacking (this is why every good hacker is part mystic). Ability to enter such concentration at will correlates strongly with wizardliness; it is one of the most important skills learned during larval stage. Sometimes amplified as deep hack mode.
Being yanked out of hack mode (see priority interrupt) may be experienced as a physical shock, and the sensation of being in hack mode is more than a little habituating. The intensity of this experience is probably by itself sufficient explanation for the existence of hackers, and explains why many resist being promoted out of positions where they can code. See also cyberspace (sense 3).
Some aspects of hacker etiquette will appear quite odd to an observer unaware of the high value placed on hack mode. For example, if someone appears at your door, it is perfectly okay to hold up a hand (without turning one's eyes away from the screen) to avoid being interrupted. One may read, type, and interact with the computer for quite some time before further acknowledging the other's presence (of course, he or she is reciprocally free to leave without a word). The understanding is that you might be in hack mode with a lot of delicate state (sense 2) in your head, and you dare not swap that context out until you have reached a good point to pause. See also juggling eggs.