The problem with chihuahuas is that they have a big dog attitude in that tiny body. It doesn't occur to them that the dog they're going for is several times their size.
They can't entirely help it, because it's been bred into them to be fiercely protective of their home and their human(s) at all costs. Proper training can help, but I don't think many people bother with it. They figure their tiny pup can't hurt anyone because he's so tiny. "Training? We don't need no stinkin' training!"
All that said, that was a classic passive aggressive move Dunc made, peeing into that chihuahua's yard. He just had to assert his dominance, and look what happened! I'm not surprised that little critter was enraged.
Sorry about the 7000 teeth, Dunc, but you brought that on yourself! 
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