thankyou..

I personally feel you shouldn't scare the kids.  it may lead to irrational fears all their adult life as well.  I grew up with a dog and most dogs don't bite kids unless if he is really unfriendly but also happens only if they owner keeps them chained.  you can general advise them not to go to near the dogs but scaring the kids isn't a solution. you can make them sleep telling them something positive.  pray with them.  make them listen to some music and putting them to sleep. telling them something may also cause unnecessary nightmares

I think when you say dog will bite you it is a advise and not a lie. you are the first teacher of your kids so they will look up to you for everything.  and as you have mentioned putting he kids to sleeps by some telling something scary is not a good practice and it might affect child psychology.  there are other better  ways for making them sleep also.