According to The Phrase Finder, a plugged coin is one that has had part of it removed and then filled with a lower quality metal. Because nickels are already not worth much, a plugged nickel is completely worthless.
The phrase "not worth a plugged nickel" comes from the illegal practice of removing some of the metals from coins and replacing them with cheaper materials. Plugged coins have been tampered with and are therefore no longer legal tender, rendering them completely worthless. The phrase "not worth a plugged nickel" started in the 1880s. Although any coin can be plugged, the nickel is referred to most commonly in the expression.