(we went through the same thing with the cats when the dog showed up. The big male Siamese whomped the poo out of the puppy, it didn't do her any harm and it DID engender respect. She will sniff his butt respectfully, but she won't chase him - not true wrt the other two cats. Although the youngest actually enjoys it - she runs up to the dog and "tags" her, then runs away.)
I think my Siamese tries to get the dog in trouble. He (the dog) isn't supposed to chase the cats, but Tam will poke him or otherwise get his attention, and then if Cisco chases him, he'll roll over on his back and start crying like "Hey, look what the mean old dog is doing to me!"
But if I ignore the proceedings, he gets up and walks away.
Brat!