There are two kinds of lace card: one is a piece of pierced cardboard or more usually, waxed paper or parchment used to make lace, with perforations for lacemaking pins, guide lines, and sometimes other instructions. The other is a lacy-looking punched card with all its holes punched out, thereby producing a card with severely reduced integrity which can collapse and jam in card readers and other machinery. Old punch cards make excellent cards for making lace, if they haven't been used first.

lace card n. obs.

A punched card with all holes punched (also called a `whoopee card' or `ventilator card'). Card readers tended to jam when they got to one of these, as the resulting card had too little structural strength to avoid buckling inside the mechanism. Card punches could also jam trying to produce these things owing to power-supply problems. When some practical joker fed a lace card through the reader, you needed to clear the jam with a `card knife' -- which you used on the joker first.

--The Jargon File version 4.3.1, ed. ESR, this entry manually entered by rootbeer277.