It implies that someone or something stands out as exceptional, exceeding the ordinary in some way.
Here are some examples of how it can be used:
* "Her design skills are cut above the rest; she always manages to create something unique and innovative."
* "This restaurant is cut above the rest in terms of its cuisine and atmosphere."
* "He's cut above the rest when it comes to problem-solving; he always finds a creative solution."
The phrase suggests that something is not just good, but exceptionally good. It's like saying that something is in a class of its own.