Skin problems are multi-factoral and very frustrating since they are so complex.
For skin problems there is usually a primary problem and often one or more secondary problems.
Primary problems include mites, such as scabies and demodex, flea allergy dermatitis, food allergy dermatitis, ringworm, atopy (environmental allergies), and others.
If your dog becomes itchy from one or more of the above and scratches and bites the areas, bacteria and moisture (from his mouth) are introduced into those areas. The bacteria causes a secondary pyoderma (bacterial skin infection), and the moisture sets up the right environment for a yeast pyoderma (yeast skin infection).
Obviously you will need to take her to the vet to have this sorted out.
Your dog's vet may need to perform a variety of tests, which can include: a skin scraping, allergy tests, fungal assay, cytology of any skin secretions, even biopsies, and more. Depending on your dog's age your vet may want to perform thyroid function tests and other blood tests. Since skin problems are multi-factorial, many tests may have to be performed, or, you may be lucky and the vet finds scabies, for example. Scabies can be successfully treated these days, it just takes a long time to resolve.
Allergy testing can be expensive, but allow your vet to perform the less expensive tests first. Allergy testing can be performed later if you cannot afford it now.
Treatment will depend on what your vet finds and it may consist of oral anti-bacterial medication, anti-fungal, a steroid or other anti-inflammatory, anti-histamines, a change of diet, shampoos, anti-parasite medication (if scabies, demodex or fleas are found), and more.
wow hate to hear that . i had a boy shihztu who had real bad skin allergys, he took predsone shots and lived on meds all his 17 years of life. the smell is yeast infection, he needs meds for that and mine had it so bad that he lost his hearing from all the ear infections, i had him at dr every two weeks , but did not good, dont feed table food that can cause them and my vet gave me shampoo that helped some. how old is shihztu how long this been going on. wishing you all the luck hope dr answers being i have a 8 week old coming in may i want to avoid that again