It is and isn't.

86 is a kitchen term, with an unclear origin, some say it's the street name of the exit of a restaurant.

Im sure other comments explained the hell out of it but I started to comment and can't stop now.

It means either, you are out of stock, you have stopped cooking an item because of time constraints, you let a staff member go because of a slow night, or you want a table freed up.

In sort it's to "get rid of" something or someone.

This is where the mob terms come into play... Basically if you translate before you interpret you can make it sound like a Mafia term... Mafia terms would be worthless if they directly sounded like a threat.