According to dreammoods.com, this is what the two major elements of your dream mean. I couldn't find any referenece to dogs underwater, though. You might have to research a bit more to find out if there is an interpretation, but I hope the following helps:
Underwater
To dream that you are underwater, suggests that you are feeling overcome with emotions and are in need of greater control in your life. You may be in over your head regarding some situation.
To dream that you are breathing underwater, represents a retreat back into the womb. You want to return to a state where you were dependent and free from responsibilities. Perhaps you are feeling helpless, unable to fulfill your own needs and caring for yourself. Alternatively, you may be submerged in your emotions.
Dog
To see a dog in your dream, indicate a skill that you have ignored or forgotten, but needs to be activated. Alternatively, dogs may symbolize intuition, loyalty, generosity, protection, and fidelity. Your own values and intentions will enable you to go forward in the world and succeed. If the dog is vicious and/or growling, then it signifies some inner conflict within yourself. It may indicate betrayal and untrustworthiness. If the dog is dead or dying, then it indicates a loss of a good friend. Alternatively, it represents a deterioration of your instincts. Also consider common notions associated with the word dog, such as loyalty ("man's best friend") and to be "treated like a dog".
To see a happily barking dog in your dream, symbolizes pleasures and much social activity. If the dog is barking ferociously, then it represents your habit of unnecessary barking at people and the situations around you. It could also mean unfriendly companions. To dream that a dog bites your on the leg, suggests that you have lost your ability to balance aspects of your life. You may be hesitant in approaching a new situation or have no desire to move forward with your goals.
To dream that you are buying a dog, indicates your tendency to buy your friends or buy compliments/favors. Alternatively, it suggest a need for you to find companionship.
To dream that you are dressing up your dog, signifies your attempts to cover up your own character flaws and habits.**See The Dream Bank: "The Bunny Dog" & "Dogs In The Bathroom"
