I work with dog-dog aggression a lot. I get lots of practice in the congested city of Chicago, and I use techniques that work. As with any training topic, there are many competing strategies out there, but I urge you to think about the psychology of anxiety and aggression.
If an animal is not hunting for food (one form of aggression) if they show aggression towards another animal it is almost exclusively as a result of discomfort. "You are too close, get away from me!" To help a dog feel more comfortable, you have to help them BEFORE they start the "rehearsal" of the behavior.
If the pattern is currently:
"I see a dog and eventually I will bark and lunge at that dog." You need to change the pattern to "I see dog I am calm."
This is how it works: If your dog currently is routinely in a situation where she ends up barking, she can start to predict the discomfort that will eventually happen and get more anxious earlier in the process. I think about it as getting anxious about getting anxious.
I like to use an analogy to a human experience to help my clients understand. If you are terrified of roller coasters, you might get anxious as soon as one of your friends even suggests going to the amusement park. You can already predict how you will feel at the park and start to go over that feeling in your head. Now think about how you might feel driving to the amusement park, walking through the gate, etc.
The ANTICIPATION of the event can actually be stressful. The same process happens with dogs. I usually get calls from new clients when their dog's behavior has gotten worse. "They used to be ok with dogs about 10 feet away, and now they bark when the dog is 50 feet away!"
So now, how do you fix the problem? I will post a more detailed answer at some point . . . want more info . . . comment on this post and I will do it faster . . . . The main point I want to talk about today is the very common practice of having a dog sit when she growls or barks. Not inhumane, not always a bad idea, but . . . often it can send a dog into an anxiety-ridden tailspin.
If your dog is anxious 20 feet from a dog and you have her sit, she is MORE vulnerable when she is sitting. If you have done lots of training and sitting is a conditioned response, now you've done it. Part of her brain is telling her to sit, and part of her brain is telling her to fight or flee (the two instinctual reactions when any animal is in panic mode).
So now what can happen is your dog is anxious. She wants to run away or fight but is told to do something else that will make her more vulnerable.
What should you do if your dog is anxious or aggressive? Move her away and desensitize her to the event so she doesn't even start to feel anxious.