To interlace is to weave, tangle, or twist things together. When you hold hands with someone, the two of you interlace your fingers.
When you do sit ups, you interlace your fingers behind your neck and bend your knees, and if you learn how to make a basket, you'll interlace strips of rattan reeds or willow branches. You can also use this adjective to mean "intersperse," as when you write a short story and attempt to interlace dialogue between paragraphs describing the action. Interlace combines inter-, "between" and the verb lace, "fasten, entwine, or braid."