Pugs are one of the breeds affected by pigmentary keratitis. Boston Bull Terriers are also susceptible to PK, along with other breeds with very prominent, exposed (“bulging”) eyes.

The beginning sign of pigmentary keratitis is a small dark brown or black spot of pigment toward the inside corners of the white of the eye. The spot spreads gradually, eventually covering the entire eye with a brownish film and blocking the ability to see through it, essentially rendering the dog blind.

Supposedly this condition is brought on by an insufficient amount of tears being produced by the eye, leading to the ultimate drying out of the eye. Entropion, where the eyelid rolls inward, can also contribute by irritation caused from hairs and lashes scratching the cornea. Environmental factors, such as dust, and trauma can also be factors.

A test known as Schirmer Tear Test can be done by your vet to determine if adequate tears are being produced by the eye.

To treat the dry eye (Keratoconjunctivitis sicca), treatment is normally through the use of eyedrops (Cyclosporine or Tacrolimus), given once to multiple times daily. Some vets recommend the use of Pred-Forte, an anti-inflammatory, to arrest and possibly partially reverse the PK. Life-long therapy is often necessary. Surgery is performed when entropion or other defects are involved. For severe cases, a Keratectomy may be performed, which is essentially the peeling off of the top layer of the cornea.

Update: Article on Pigmentary Keratitis, with information specifically related to Pugs (Aug 1, 2009 By: B. Keith Collins, DVM, MS, DACVO CVC IN KANSAS CITY PROCEEDINGS):
http://veterinarycalendar.dvm360.com/avhc/article/articleDetail.jsp?id=651375&sk=&date=&pageID=2

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“In Pugs, a combination of surgery and topical treatment is usually appropriate. Topical treatments that may slow or reduce corneal pigment include cyclosporine, tacrolimus, and corticosteroid. There is no evidence that cyclosporine is more effective than tacrolimus, or vice versa, so select the one best tolerated by the patient. Judiciously applied steroids can be of benefit, but they should always be used in a brachycephalic breed because of their propensity for corneal ulcers. Beta-irradiation or lamellar keratectomy may be effective treatments but are usually reserved for patients where pigment has progressed to the point of substantial visual impairment.” (See article link for additional information.)
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As with almost any condition, treatment tends to be more effective with earlier detection. Consult with a veterinarian that is knowledgeable and experienced with PK, preferably with a veterinary ophthalmologist.