Hehehe, Nikko is my first boy dog too, and I wondered for a long time what the little patch of dark skin was between his weiner and his bumhole. One day, that dark patch started filling up with something soft yet firm.... and then it dawned on me - balls!!! LOL, I felt so silly. Here's a pic we took right before we had him neutered... I can't really tell from your picture, but like others said, that might be what you're looking at.
NikkoByeBalls6mo.jpg