Weak flop fold?

[Bruce D]

BTN is 21/11/1.50 after 60 hands. Very deep into the red.
CO is 64/0/2.13 after 40 hands. Not seen anything completely noteworthy other than she plays horrible hands preflop. She will also limp with all her premium hands and then play passively with her monsters such as a set of aces. I saw her limp/call with KK then raise a dry board with no ace.

PokerStars 0.10/0.20 Hold'em (6 handed) Hand History Converter Tool from FlopTurnRiver.com (Format: 2+2 Forums)

Preflop: Hero is SB with K[img]/images/graemlins/club.gif[/img], Q[img]/images/graemlins/heart.gif[/img].
<font color="#666666">2 folds</font>, CO calls, <font color="#CC3333">Button raises</font>, Hero calls, BB calls, CO calls.

Flop: (8 SB) 7[img]/images/graemlins/heart.gif[/img], 8[img]/images/graemlins/heart.gif[/img], 5[img]/images/graemlins/spade.gif[/img] <font color="#0000FF">(4 players)</font>
Hero checks, BB checks, <font color="#CC3333">CO bets</font>, Button calls, Hero folds.

I figured with the Btns over call that he had AK, AQ, KQ. I am also not completing the action. I have a bdfd and that is all I can hope for I think. Weak fold?