My take on what happened is that your cat likes the kittens and followed them and rather than being aloof and pugnacious showed that he wanted to bond with them. When the dog attacked one of the kittens, he was just getting back at it for what he did to "terrify" his kitten. Cats are good at that. Now the question is, did the dog make the connection that if he goes after the kitten again Mr. Boss Cat will even the score?
Even with my 2 cats that cuddle together and adore each other, sometimes they do get into playfights where the male trys to dominate the female by nipping at her. She doesn't like that, and will get back at him 2 times worse what he did to her---not at that moment----but usually later in the day.