。
I dropped out of school in my second year of middle school.
Literal
I [topic-は] middle-school-2nd-year [at-で] school [object-を] dropped-out.
中二 is a casual abbreviation for 中学2年 ('second year of middle school' — Japanese middle school is 3 years, covering ages 12–15). で marks the grade level as 'at the stage of.' 退学する ('to drop out, to leave school') takes を for the school, treating it as the thing being left. The sentence is blunt and short — typical of matter-of-fact personal history.