Fearful aggressive behavior towards other dog is usually because of a lack of early socialization with other dogs or a learned fear from being attacked by a bigger, bully-type dog.
Dogs can be fearful for many reasons. It can be an inherently skittish breed (Chihuahua), have suffered some kind of trauma, people around them do the wrong things when something that might be fearful occurs (such as coddling the dog when it shakes), or they have never been exposed to the world around it (living in a backyard its entire life). There are many extremes of fear which can result in aggression or health issues. It is important to remember that every dog put in the right situation can bite, but it is how we react to what the dog tells us if we will get bit or not. When working with fearful dogs, we always want to be careful not to trigger a bite. Once a dog bites it is easier to bite again. Especially if the person reacts incorrectly to the bite.