To wear one's trousers around the hips instead of the waist, thus exposing the top of the underwear. Often the pants will be purposely baggy and oversize to accomplish the "sag." Common in urban and hip hop culture in the late 90s.
A frequently told urban legend purports that the style originated in correctional facilities where males that were amenable to being approached for anal sex would wear their pants in this fashion.
If my daughter brings home a boyfriend that's busting a sag, I swear to god I will nail-gun his pants to his hips.