Hi BrunosMom! I have a pit bull too, and do something similiar to what you do.
I took my dog through obedience school. When I see a dog in the distance, I put her in a "heel' and use the command "Watch me". If she is good while the other dog passes - praise and treats.
If she breaks the "heel" she gets corrected, but NOT for pulling towards the other dog, but for breaking the command.
This works very well for us, because now she knows that when she sees other dogs, she'll get cookies and praise.
my Vet wants her on a vegetarian diet