In a large skillet, cook the diced bacon over medium-high heat until the bacon pieces are crispy. Using a slotted spoon, remove th bacon to a paper towel-lined plate to absorb the excess grease.
Carefully pour the bacon grease off into a bowl and wipe down the skillet. Add 5 tbsp of bacon grease back to the skillet over medium heat. Add the butter and melt.
Add the flour to the skillet, whisking constantly until the flour is smooth. Cook the flour for 2 minutes, while whisking constantly.
Slowly add the milk to the skillet while whisking constantly. Continue whisking until the milk is all added and there are no lumps of flour.
Add some salt and pepper and crushed red pepper flakes (optional). Continue cooking the gravy and whisking occasionally until the gravy has thickened.
Add the bacon pieces back to the skillet (reserving some for topping the gravy). Taste for seasoning, adding more salt or pepper if necessary.
Serve warm. Preferrably over some warm, freshly baked biscuits. Enjoy!