"Max knows/will know Chad," Max said snuggling up in the crate with what Max and now Chad thought was the "dog who used to be a human."
Chad was confused as to why he and Max seemed to understand each other so well. The AI nanobots happily provided the answer. Max's owner had allowed Max's brain to be scanned by the university as an example of a well trained dog. The nanobots accessed that data to create Chad's new canine mind. Genetic data came from various genome projects, but the brainwave pattern overlaid on Chad's mind was Max's brainwave pattern. Basic commands, memories, scents and other useful bits from Max's mind integrated with Chad's mind. The overlay worked in reverse too it seemed as Max seemed to be streaming Chad's thoughts. Max was amazed all the information he was integrating from Chad's mind. Max smiled as he saw Chad's fears of Max, and was pleased that he could realize his desires while making Chad's fears and doubts come true.
Chad whimpered as he succumbed to the huge beast mounting him. The nanobots in Chad recognized Max's brainwave pattern, and began to migrate into Max from Chad and reproduce more nanobots. Max was becoming upgraded to the same hybrid man dog level as Chad.
Max exploded into the smaller dog, and terrified Chad felt the bigger dog's mind intrude on his own mind. Chad knew that he was owned, and he knew Max knew that he owned Chad.
Max's mind instilled into Chad a weird sense of security to Chad. Max took care of his property. Chad was now Max's property. Max would protect him.
Images of doubt from Chad involving Master Karl keeping Chad as his slave triggered a strange reaction from Max. Brad was good master. Karl was a bad master. Max would protect Chad from Karl. This became an imperative for the adaptive AI operating the nanobots didn't have any instructions, so they accepted making Max able to protect Chad from Karl.
Karl had no idea that his tablet was now spying on him to design Max to defeat him. Karl would need to become a dog like Chad or Max would need to become human. Max would need to be a nanobot controller like Karl's tablet. Max was becoming a cybernetic organism. Chad was aware of what was happening, but his attitude toward Max was changing to what Max desired. He was feeling strangely happy and safe while Max continued to be knotted to him. He still wanted to be human, bit if he was stuck as a dog, at least Max was with him.