Spag Union Military Academy is an all-boys military school that Greg's dad tried to enroll him into if he did not behave well. Boys could attend Spag Union once they reached the middle school age. Greg did not go to Spag Union because during Seth Snella's half-birthday party, Greg saved his dad from having to try to make Seth laugh by doing funny stuff by trying to get Seth's blue blanket back, ending up hanging on the tree and his pants falling down in the process. That accident prevented his dad from having to act in front of Seth, and his dad payed him back by not forcing him to go to Spag Union. It is briefly seen in The Last Straw and mentioned in Dog Days, including the Dog Days movie.
In the movie, Rodrick finds a Spag Union DVD package in the mail a day after the work lie backfired. While he and Greg are watching it, it makes them worried they would end up there. The film also shows a student who used to play video games every day, but when he got sent there he started reading math books saying that he found more adventure in the book. Another student used to lie that he would be studying, but he would hang out with his friends at the mall. He now has a tracking device so he can't sneak out. After the tape, Rodrick tells Greg that he should just join the Wilderness Explorers to prove to his father that he won't need to go to Spag Union. Frank does not send Greg to Spag Union, after learning the truth that his neighbor Mr. Warren made fun of him and after he accused Greg of burning his tent.
Spag Union is mentioned in the online version as well, only that it has the name "Bishop Garrigan."