I am sorry that you are having this problem with your dog. When we see blood with diarrhea this is a sign of inflammation in the large intestines (colon). Can it be caused by dietary indiscretion like eating candy from your granddaughter? Yes. Other possible causes are ingestion of a foreign body, infections, or even part of a systemic disease to name a few causes. This is what you can do:
1- Do not give things like Pepto Bismol or Imodium. You see, stopping diarrhea with medication can make things worse if this is related to an infection or ingestion of a foreign body. In addition, Pepto Bismol can make the bleeding worse.
2- No food or water for 6-8 hours, need to give her gastrointestinal tract time to rest. Then, offer a small amount of water followed by a diet of rice (75%) and boiled boneless chicken or ground beef (25%) until the stool is back to normal then wean her back into her regular diet.
3- Supplement with a probiotic, these are friendly bacteria that help with regularity and inflammation. You can buy this over the counter in any pet store.
4- Follow up with your family veterinarian for a hands on examination.
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