My brother has an extreme reel it has worked fine for the past 2 years since he got it. Ever since about 2 or 3 weeks ago he noticed that sometimes when he snaps the tip of the rod up, or jerks, the spool spins and backlashes. The drag will be turned up and everything, it just seems as if the drag is not engaging. But when the reel is normal, the drag works fine. Any suggestions? or is it time to just retire it.

It's not the drag rather the spool drive coming disengaged. The cost of service here is $22 plus parts n shipping. I wouldn't junk the reel over what you've described.

I had that same thing happen to me , and it was the anti reverse bearing , after cleaning and re lube it has worked just fine

Take it too Basspro. They might give you a new one. And they're rod and reel service is pretty cheap