This sounds gross.. But have you had his anal sack checked?  small dogs need to have this sack manually expressed sometimes.. A vet or groomer does this usually unless you know how to.. That can be the cause of the smell.. Also sometimes there can be a blockage is he having problems going #2?  The best bet is to call your vet.

 Get the poor thing to the vet, since you are concerned enough to ask, I think you and the dog would benefit from it. Hope this helps, good luck.