Knowledge of Smile.dog's existence was brought to the attention of non-dreamers through this documentation of a dreamer's first encounter with smile.jpg.
Smile.dog is believed to be a fugitive from Hell itself, although it is not known what his role there was or what caused him to leave, as Smile.dog has given no further information on his past. It is possible that in future episodes his past will be explored more deeply.
At some point after leaving Hell, Smile.dog encountered Slenderman. The two have since become inseperable friends.
Smile.dog is a talking dog. He is a very lax, go-with-the-flow sort of person, and the first to warm up to Gary.