I would definitely talk to your local police department about what happened. Obviously the one dog is dangerous and in need of training, and chances are the other one is too since the owner seems pretty irresponsible. You should file a complaint against the owner even though there wasn't any serious injuries to your dog. Then if that dog bites another dog again or a child, there will be a record of the attack on your dog. Maybe a talk from an officer would smarten the guy up a bit.
As for the pepper spray, I don't know if that would work. Maybe someone else here could help you with that. I'm glad you and your dog weren't injured though
