Pamela,
The first thing that should be done is to rule out a medical cause for the aggression. You can read about these here:
http://www.petplace.com/dogs/medical-causes-of-aggression-in-dogs/page1.aspx
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If there is no medical cause for the aggression, then it is strictly behavioral. In that case, I'm going to suggest some changes in order to bring this dog under control. Dogs are aggressive toward other dogs for a variety of reasons. It might be that they are fearful of other dogs and thus are aggressive before the other dog can be. In other cases, a dog is aggressive in order to dominate the other dogs and be the alpha member of the pack. Other causes could be that the dog feels they are the alpha member of the pack and as the alpha member they must protect the pack (you) from threats (other dogs). It can also be a combination of these things.
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In addition, owners sometimes make the situation even worse by tensing up and worrying about what will happen. The dog senses the owner worry and feels that he is justified in his aggressive stance because you are obviously worried about the dog. They don't know you are worried about them attacking, they just feel that you are worried and assume it is the other dog. I know you said your weren't anxious and that is good, but if you hold the leash a little tighter or hesitate and your mood changes, your dog does pick up on that as well.
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You do need to have not only physical control but on a mental level, as well. To accomplish this, you may want to have the dog wear a basket muzzle anytime he is not in your own house or yard. This will not only prevent bites but may allow you to feel more at ease when walking him and not feel like you have to be vigilant in your observation of what is going on around you.
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Many dominant dogs are described as well behaved until you try to get them to do something they do not want to do, and then they reprimand you either with a growl or bite if you don't heed the growl. Things like taking away something they want, making them move when they don't want to, waking them up, etc can cause them to reprimand (bite) you. I'm not saying your dog is dominant. Only you could determine if he is displaying any dominant type behavior.
Dogs that are allowed on furniture (even if put on the furniture) tend to feel that since they are elevated to your level or higher if on your lap, they mentally feel elevated as well in the pack order and thus are equal or higher in the pack as the humans. Keeping them on the floor can help lower them mentally back to a submissive position in the pack. So the first thing is to not allow him higher that the humans or even on the same level. In addition, humans shouldn't be on the floor with him either. A small short stool is enough to keep them higher than the dog when petting the dog. Attach a leash and use it to remove him from the furniture. Give a correction in the form of a quick tug and firm "NO" when he attempts to get on and a treat when he starts not trying to get on the furniture. Thus you are providing negative reinforcement for the getting on the furniture and positive reinforcement for the desired behavior (not attempting to get on the furniture). Perhaps if your husband understands the reasoning why the dog should be on the floor, he'll be more reasonable in keeping him on the floor. Now if it can't be accomplished, at least have the dog work for the privilege of being on the couch such as requiring Hank to sit or do a trick.
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If you can, I would do group classes (with the muzzle if necessary) and let the trainer know of the problem your dog has. This serves a few different purposes. It reinforces your role as alpha as well as socializing him around other dogs and people in a "controlled" environment where all the dogs are under the control of their human. . Before you can get into classes, I am including links to a couple of other sites that teach some good methods of training. They might come in handy for you to practice obedience.
http://www.sibes.org/sdo/index.asp~m=article&name=sdo.id.A000232
http://www.luckydogs.info/pdf/Teaching-the-basic-commands.pdf
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The following site is helpful. Be sure and click on the link to the left on obedience. and links on subsequent pages leading to detailed instructions.
http://www.schutzhund-training.com/training_theory.html
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Training works best if you train at least 30 minutes a day (two 15 minute sessions). I would start making your dog work via the Nothing in life is free program (NILF). It is outlined below.
http://www.pets.ca/articles/article-dog_nilf.htm
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I think you may be surprised at how well your dog does with starting back up daily training. Dogs like knowing what is expected of them and they love the little paper thin slices of hotdogs that I use for treats while training. Give this a try and see how it works for you.
It will be helpful if you can find someone with a dog to help you with training. I want you to change the way you are using treats just a little and your form of training as well. I am a food reward based trainer but I also believe in negative reinforcement as well because I've found dogs learn quickest when they have consequences for bad behavior as well as rewards for desired behavior.
Also, if you were tempting your dog with treats after he was showing the unacceptable behavior, the dog may have thought you were rewarding the very behavior you were trying to stop. So we are going to be sure the dog understands what behavior is unacceptable and which is acceptable.
What you will do is have your dog on the leash. You will have your helper off in the distance. Your helper will gradually move their dog a bit closer to you preferably walking past your position in the distance. As long as your dog ignores them, you can give your dog praise and a treat. The second you see him fixate on the other dog or show any other sign of aggression (hair standing up, etc.) give your dog a correction by giving a short tug and a firm low toned "NO". It shouldn't take your dog long to realize you will not tolerate the aggression and that if he ignores the other dog, she gets treats. This provides negative reinforcement (correction) for lunging and aggression and positive reinforcement (treats and praise) for the desired calm behavior. Once this happens you can repeat the training moving the other dog closer until he is no longer trying to lunge at other dogs. You will need to practice this when you and your dog are walking as well.
You might also have your dog wear a DAP collar. A DAP collar emits a pheromone similar to the one a female dog emits when nursing pups which is helpful in calming adult dogs as well. It will likely take a lot of work and consistency in training before you will see a lot of training, but he may surprise you and recover quickly. Another trick that may help is when you notice your dog's tail is up high in a dominant posture, brush your hand down the tail, bringing it to a level posture in line with the back. This is a calm neutral position and can help keep a dog in a stable frame of mind and not displaying dominant behavior.
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In addition, if the situation is not improving using the techniques I have mentioned, you may have to consult a professional in person behaviorist to come work with your dog and family. . You can usually find a behaviorist by asking your Vet for a recommendation or you may be able to find one using the following site.
http://www.apdt.com
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I hope I have provided you with some additional things to think about as well as some techniques that haven't been tried yet. Sometimes a small change in how you are training goes a long way toward correcting a behavior. If you would like any additional information or have more questions please don’t hesitate to press the reply to expert or continue conversation button.
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Since there have been recalls on certain foods, please check the following site to be sure the food your animals eat is not affected. If it is affected, contact your vet as soon as possible. Have your dog seen if they have any symptoms.
http://www.fda.gov/AnimalVeterinary/SafetyHealth/RecallsWithdrawals/
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