1. WHO is at fault?
It's not about fault. Human sexuality is a weird and warped thing. As regards a sexual fantasy, no one is to blame.
2. Is she a slut, or just a girl who wants to fulfill her man's sexual desires and fantasies?
Neither. You're oversimplifying things and missing the point.
3. Should HE be mad at her?
No. Being angry at her for agreeing to indulge his fantasy is unfair. Believing she never fantasized about fucking someone else until now is naive.
4. Should he look at her differently now?
Relationships adapt to incorporate changes. Solid relationships grow stronger, poor ones grow weaker.
Is the relationship a happy one or does "your friend" want to see it end? Or has he recently discovered that he gets off on humiliation and it's freaking him out?
The important thing is not to be judgemental about fantasies. Everyone has warped ones whether they're willing to admit it or not. Sexuality touches a lot of aspects of being, including darker ones like violence and destruction (of others or yourself). Just try not to panic, be glad you can discuss these things with the woman, and realize that you don't have to act on every fantasy if its risks or downsides are excessive.