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That's entirely untrue! Milk chocolate is not very likely to kill a dog, and is way less harmful than bakers or dark chocolate. After all, if I ate the equivalent amount of milk chocolate that would be toxic to a dog I would be pretty sick too. But it is by no means "harmless." And an 8lb dog is small enough that they can eat enough milk chocolate to cause problems, I've seen it first hand when a client's toy poodle ate one of those giant Hershey's kisses. Even if the dog doesn't eat enough milk chocolate to be a toxic amount, the sugar and fat (and in many cases the packaging since most dogs snarf that right down along with the chocolate) could be enough to trigger pancreatitis, which can be deadly if not treated (and can also increase their risk of becoming diabetic later in life).
Thank you for posting that link. It is a very well written article which outlines the dangers of chocolate without being alarmist. To the OP, the amount of actual chocolate in the amount of cake you describe is unlikely to cause toxicity in your pup. I would definitely keep a close eye on her though for signs of pancreatitis (repeated vomiting, lethargy, abdominal pain/tenderness, dehydration, significant decrease in appetite or anorexia, and prolonged diarrhea...I would expect her to have loose stools and diarrhea for a day or two, but if it persists longer than that it may be an indication of something more serious) because as stated before pancreatitis is in itself a serious disease and can be triggered by eating things a dog isn't supposed to.