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I assume you mean she is chewing on herself and in the process pulling out her hair. Without more information or seeing the dog it is really hard to say, but it could be due to a number of things such as diet, allergies (environmental or food), dry skin, fleas, mites, hormones, stress, recent vaccinations,  reaction to heartworm, tick and/or flea preventative...the list goes on.  I have dealt with itchy/allergic dogs and it can take a while to figure out the cause.  A great forum to try is: http://pets.groups.yahoo.com/group/ALLERDOG/    You will get a  tremendous amount of help there from a lot of very knowledgable people. Best of luck to you and your dog.
 

I have used Baby powder ( cornstarch with alove and vitamin E) and it has helped she was licking herself to the point that she had bald spots .Also works on hotspots too as it dry it up and  ease up rash .

Read the whole message starrchar wrote - good answers.

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 If it,s a hot spot with rash or chewed sore I have used medicated gold bond on it after using a electric razor and triming it back about a inch from the effected area the gold bonds helps it dry up quickly and the taste is unpleasent to the dog so it stops chewing the medictaed also helps with the itching.