Possesive Dog to Dog aggression. Please Help.

[Christen1285]

My in-laws adopted a sweet girl from the pound named Strummer. She's approx. 3 1/2 and seems to like dogs; loves cats - she's a Shepherd mix, I think Akita probably is somewhere in there. She's fine with dogs while walking, she just ignores them actually, even when they want to play with her.

Her eyes are a little dead which is weird, she shows no emotions when being praised, pet, or scolded. The pound and previous owner said she had two chihuahuas in her previous home and was not food aggressive. Within hours of my in-laws bringing her home, Strummer bonded closely to my mother-in-law and followed her around the house - My mother-in-law was thrilled I think to have bonded so quickly.

Since Strummer likes other dogs and had two chihuahuas in her previous home my husband and I decided to bring our small pekingese over for a visit. Our dog went near a toy and Strummer attacked... which was okay for us, we removed all toys and tried to be overly positive when Strummer was being okay with our dog, Billie Jean. Things were okay, Strummer displayed dominance positions over Billie and Billie submitted and even rolled over on her back - fully submitting to Strummer. So we thought things had been worked out and maybe they'd even eventually play a bit later on. And a few minuted later Strummer did go into play mode and seemed to be fine, Billie was thrilled to have a play mate and got excited - after jumping around with Strummer a bit she then happily went to receive some attention from my mother-in-law. Before my mother-in-law could even get her hand low enough to reach Billie, Strummer was right there standing over Billie. Fine, right? Dominance again, good - Billie submitted right away but Strummer didn't back off - Billie couldn't move away and Strummer just stood over her - then without warning she attacked Billie while Billie was in submission. It wasn't a warning, her standing over was, the growling was... but she attacked.

Calling Strummer off didn't help at all, so I put my self between and grabbed my dog. This almost happened again once my father-in-law got on the floor to play with the dogs, as soon as he pet my dog Strummer was up in arms.
Later on that night, Billie simply was walking past my mother-in-law and as soon as she was near my mother-in-law Strummer stood over her again, Billie submitted again, and then Strummer again attacked without good reason. She lifted Billie off the ground somewhat before I put my arm between them and grabbed my dog. A second later, or before and my arm would have been bitten - but Billie is like our child so I didn't think about my actions.

I'm afraid that this possessiveness over her owners will transfer over to small children - when we have children my husband and I would like to feel confident/safe that our children can run to grandma without being even growled at never mind bitten - we don't want them to fear dogs.

Strummer is a good girl for the most part, and I don't want them to send her back to the pound of course, but I also don't want to fear this dog. We used to be able to have our in-laws dog-sit for Billie when we went on short vacations - but now I don't think I'll be able to do that - my dog LOVES (I mean REALLY LOVES) my father-in-law and it's really sad that he can't pet her when Strummer is around now, and that I can't bring Billie over for visits when we have dinner at their house, etc.

Sorry this is so long, but I didn't want to leave any potentially important details out...