First things first: the dog *cannot* chase the cat. If that cannot be controlled by voice command alone (and very likely it can't if he's already hyped and primed to chase) then PUT THE DOG ON A LEASH. The basics are as simple as that. You've got a house rule that says no chasing and trying to kill the other pets (be it cat, bunny or hamster). Well, if the dog doesn't yet understand that rule, then quite simply it should not be allowed to be in a position to break the rule. So control the dog's behaviour until you *have* taught it. That means a leash so that it cannot chase.
Then you start on the desensitisation. Of both cat and dog to each other. In the case of the cat, that's likely to take a while, since he's already been terrorised. It will take a while of absolute no chasing before he's likely to trust that he
won't be chased, and is brave enough to venture out and NOT to run. There are no shortcuts to re-establishing his trust. You've just got to give that one time, and to encourage him out as much as you can.
For the dog... First and foremost is that you *must* prevent any chasing. That doesn't mean keeping the pup crated all it's life. But it *does* mean that until the pup is trained NOT to chase, that you should be controlling Baylee's behaviour until such time as she's trained. If that means a leash, then it means a leash. But you've no hope of having a greater influence on her behaviour than instinct and adrenelyn once she's started to chase. So stop it before it starts. Then you've a hope of teaching her it's not appropriate, EVEN if the cat runs.
Has Baylee been taught a "leave it" command? If not, now is a very very good time to do so. A short article on that here:
http://www.boxerworld.com/forums/view_the-leave-it-command.htm
Aside from preventing the chasing from happening, what you need to be teaching the pup is to ignore the cat. So, you put her on a leash so that the chasing can't happen. That's the essential step 1. Then you need to start the desensitising. For this, you rather need the cat to be around (hopefully she's still willing...), and (whilst preventing chasing from happening), start trying to draw the dog's attention away from the cat. You ask the dog to "leave it" or to look at you (whichever can work), and then *reward* the dog for turning her attention away. Then engage her in something else that's fun. In short, you are rewarding her for ignoring and simultaneously giving her something more rewarding to do. It's win-win for the dog, so she should be compliant.
Keep on doing this, and after some time you should end with a pup who doesn't pay any attention when the cat comes into the room. Or that sees the cat, then immdediately looks to you to see what game you've got in store. But doesn't chase, or make any move on the cat. Ignoring alone is a very positive step, and is probably about the time that you can try letting the dog approach the cat without jumping in with your "leave it". BUT - the instant the cat either turns away, runs, or hisses/swats or anything else that lets you know the cat has had enough, you immediately instruct the dog to "leave it" and to come to you. Then reward the compliance (reward WELL).
Do you see what you're teaching here? In the first instance, it's desensitisation. Getting the dog to the point that the first instinct isn't to chase and kill. THEN you're working on ignoring - teaching the dog that there are more interesting things in the world than cats. And third (but as important as the previous), you're teaching the dog that when the cat indicates enough, it IS enough. No questions asked, the dog backs off the instant the cat says back off. Put another way, the
cat is always right (even if it's not). Because the cat is the one who can get hurt or killed, and you cannot afford to have a situation where the dog is inclined to chase or to retaliate. Thus, you need to teach them not to. Does that lot all make a bit of sense?
DO put that pup on a leash straight away though. With the best will in the world, you'll never over-ride instinct and adrenelyn if you allow chasing. So you've got to put a stop to that one before you put your energies into teaching her more appropriate rules. It's a pain, certainly, but it's not forever. And if you want a harmonious household, it's very much worth your while.