Wallace's problem is his unwavering policy of not lying. His parents divorced over his father's constant lying, so in a childish, single-minded decision, he decided that "honesty is not just the best policy; it's the only policy". Though this does not sound like a problem, the reader learns of many occasions when his truthfulness embarassed his mom. As an adolescent, his truthfulness hurts him both in the classroom, on the football field, and in his friendships. The first conflict is with his English teacher who gives him an F on a book review of "Old Shep, My Pal." Wallace thinks the book stinks because the dog dies at the end. Wallace is suspended from the football team until he writes a "satisfactory" book review for Mr. Fogelman. As the reader knows, that's not going to happen.
The problem occurs when Wallace Wallace is asked by his English teacher to write a book report on the book, "Old Shep, My Pal," and Wallace quite honestly expresses his displeasure with the book. While Mr. Fogelman defends it and cites the book's surprise ending, Wallace won't budge, and in fact further angers Mr. Fogelman by saying any award-winning book like that ends with the dog dying. Wallace is assigned detention until he creates a book report more to Mr. Fogelman's liking.
The conflict in "No More Dead Dogs" is that Wallace Wallace is asked to write a book report on the book "Old Shep, My Pal". Unfortunately Wallace Wallace is devoted to telling the truth always, until he lies near the end of the book.