She sings off-key.

Literal

She [topic-は] off-key sings.

調子外れに ('off-key / out of tune') uses 調子 ('tone/tune') + 外れ ('deviation/miss') + に (adverbially). 調子外れ is a na-adjective that can also be used adverbially with に. It applies beyond music — 調子外れな返事 ('an off-base response'). A compact description of poor singing ability.