I work with pound dogs so we are trained in what to do if a dog attacks. We are told to carry an umbrella - if a dog approaches you in a menacing way open the umbrella and use it as a barrier. Stand tall and stomp your feet while slowly going towards the dog, in a deep voice say (don't yell) Go Home again while moving towards the dog. Try not to panic, don't scream as that will excite the dog and continue to stomp your feet as hard as you can.
I have been in a few 'interesting' situations so I understand how scary it can be but you need to try and stay as calm as possible and make yourself as big as possible.
I'm sorry you and your daughter were in such a scary situation and hopefully you are able to make a complaint where you are so the official people can visit the home and make the lady aware that she needs to keep her dog under the appropriate control.

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