Naglfar is the ship made from the fingernails and toenails of those who died outside of battle. During Ragnarök, it is foretold that the Jotunn and dishonorable dead will sail it into battle against the gods.
Loki takes Magnus Chase to the ship and explains it's purpose to him. Magnus first assumes that the nails are iron nails, but Loki corrects him by telling him that Naglfar is actually made of finger and toe nails. People used to burn nails but now they don't so it creates the self-building ship.
Helgi informs Magnus and his friends that Loki plans to sail the ship of nails in the middle of summer.
There have been many disputes on whether or not nagi- means "nail", but, instead, is a variant of the Old Norse word nár, which means corpse.