Segmentation fault (core dumped) due to fgets – I think

While you can use malloc() here, it is not really necessary. You can #define a reasonable maximum line length, and declare a character array to hold the input. If you do this, you can remove the frees from your code.

You also have an issue with the way that you are using fgets(). The trailing \n is kept by fgets(), but your comparisons are ignoring this. Consequently, input is never equal to "quit", and is certainly never NULL. I have included some code that removes the trailing newline after reading into input; the code also clears any remaining characters from the input stream, which is possible in the event that the user enters more than MAXLINE - 1 characters. The test for text input is then simply if (input[0]). Alternatively, you could change your tests to take into account the extra ‘\n’ character.

#include <stdio.h>
#include <string.h>
#include <stdbool.h>

#define MAXLINE  1000

int main(int argc, char* argv[])
{
    char input[MAXLINE];
    char *ch;                       // used to remove newline
    char c;                         // used to clear input stream

    // ensure one and only one command line argument
    if (argc != 2)
    {
        printf("Usage: %s [name of document]\n", argv[0]);
        return 1;
    }

    // open a new document for writing
    FILE* fp = fopen(argv[1], "w");

    // check for successful open
    if(fp == NULL)
    {
        printf("Could not create %s\n", argv[1]);
        return 2;
    }

    // get text from user and save to file
    while(true)
    {
        // get text from user
        printf("Enter a new line of text (or \"quit\"):\n");
        fgets(input, MAXLINE, stdin);

        //  remove trailing newline
        ch = input;
        while (*ch != '\n' &&  *ch != '\0') {
            ++ch;
        }
        if (*ch) {
            *ch = '\0';
        } else {         // remove any extra characters in input stream
            while ((c = getchar()) != '\n' && c != EOF)
                continue;
        }

        // if user wants to quit
        if (strcmp(input, "quit") == 0)
        {
            break;
        }

        // if user wants to enter text
        else if (input[0])
        {
            fputs(input, fp);
            fputs("\n", fp);
            printf("CHA-CHING!\n\n");
        }
    }

    // close the file and end successfuly
    fclose(fp);
    return 0;
}