To be completely honest I don't see this situation working out with these particular dogs. Even with training, even if the dogs see you as alpha, there is still an order to be determined and the shepherd is out to make her place known.
I have a 4 year old 100 lb + male rottie and a 1 year old 30 lb Queensland mix female. They both defer to me at all times, no questions asked. But that little cow dog regularly goes after that big rottie and she has proven to him her dominance over him. She is second in pack order here, he is last!
The difference is that when my dogs squabble, while it looks and sounds like a full on dog fight, it never results in wounds or blood shed. Your dog Holly is on a mission and Chaser may be badly injured by her. Unless Chaser submits fully and never, ever gives Holly reason to be irritated, all highly unlikely, this will keep happening on a regular basis.
I would either keep them separately, which may or may not be workable for you, or rehome the younger dog.