As Iv4dogs suggests you should consult with your Vet. If it's Demodex then scraping may be able to find the mites. You might also be dealing with a localized fungal or bacterial infection. Another possibility is an allergy with a follow up bacterial infection of the skin.

If it's Demodex then you will need to determine if there is any underlying cause. In puppies the underlying cause is either an immature immune system, or one which has a T-cell defect. In older dogs the appearance of Demodex mange without any history of prior Demodex problems, suggests an impaired immune system, and the cause could be metabolic or even cancer. In your case you may not have the complete history of your puppy dog.

In puppies with an immature immune system Demodex can be readily treated with oral ivermectin for 3-6 weeks. Weekly baths with oatmeal shampoo helps gets off any dry skin and relieves itching. Supplementing the diet with Vitamin-E (dry form), and fish oil helps the skin recover from the mites.

In puppies with a T-cell defect it's more difficult to get rid of the disease initially, and it may readily occur one or more times later in life. In severe cases some puppies with the genetic defect are unable to recover from Demodex, but this is rare.