The Spanish flag has a central yellow stripe that is twice as wide as tall as each red band beside it. The coat of arms of Spain is on the yellow band, towards the flagpole side.
The Spanish coat of arms consists of two crown-topped pillars of Hercules with red banners wrapped round them displaying the Latin words, "PLUS ULTRA," meaning "More Beyond," referring to Columbus' discovery of the New World. The two columns are on either side of a shield of 4 quarters - a castle, a lion with a crown, red and yellow vertical stripes, chain mail, with three fleurs-de-lis in an oval in the center. A red and golden crown sits on top of the shield.
The columns are the Pillars of Hercules, which represent Gibraltar and Ceuta on either side of the Strait of Gibraltar.
Legend says that the colours of the Spanish flag come from the bullfight arena - with the red representing the blood and the yellow the sand of the arena. The colours of the flag of Spain were more likely to have been chosen as they were the colours of King Ferdinand´s coat of arms.
The current flag has changed slightly over the years, but its basic evolution has been:-
Official Spainsh Government Site on Coat of Arms
Spanish Government Page on the Flag of Spain
Spanish Flag Wikipedia
Spain Tourist Information About Spain for tourists