Honestly, this dog shouldn't be in your home. It's probably a dog that is fearful of children and needs to be in a home that isn't ever around them. (Think, old person who lives alone and needs company.) If you foolishly decide to keep this dog (please don't keep him!!!) read this very carefully:
1. NEVER mess with a sleeping dog. Ever. Do not under any circumstance allow this.
2. Your child should NOT be handling this dogs food. That is asking for an accident. Please stop this.
3. Don't play by covering, stacking, or putting things over a dog.
4. This dog is new, this is very scary. MOST dogs in scary situations will snap, but that does not mean they continue to do so.
5. This dog needs time to adjust to life, before your children have so much time with him. Allow him to figure out his world, then bring your childern around. Give him time and space to become secure, and THEN allow your children to cautiously be around him.
6. Be VERY cautious in their play with this dog. Do not allow them to touch while he is sleeping, eating, or relaxing. Be RIGHT there to make sure they don't poke, tug, or annoy the dog.
7. If the dog snaps after you give him time to adjust, then the dog needs to not be around children. He should find a home with no little ones, that is better suited to his personality.
Please, find a better home for this dog. There are dogs (like all animals and people) who simply can't be around children. There is a home for this dog, I'm sure...he is just a puppy and is very afraid and has time to grow and be secure. This home is just NOT yours. Try to find a home with an older couple or person, that needs some company.