You are right to be aware of the seriousness of this behavior. It might be a thyroid problem with the dog that is causing some of the behavior. I would recommend taking the dog to a vet that is familiar with the breed and having a complete blood workup done to rule out genetic and/or thyroid conditions. If that is ruled out, you might attempt obedience training that is specifically geared towards dealing with aggression type issues. If all else fails, for the safety of your children and yourself, you may need to consider giving the dog up. If this has to happen, I would recommend getting in touch with Lora Eike at ironpawakitarescue.org for referrals of organizations that might take the dog. Good luck and keep us posted!