Two Meanings of 'Fag'

Alright, listen up, you big ol' dummy. This meme is trying to be 'clever' by using a really bad word, 'fag,' which you probably hear a lot. It means two things, see? One, it's a cigarette, which is why that first guy is lighting one. Two, it's a super nasty slur for gay people, like Sam Smith, who is in the second picture getting a gun pointed at them. The 'joke' is that there are two ways to 'smoke a fag' – one literal, one violent and homophobic. You got it now, right, buttercup?