Okay. . . . so I took her in for another visit to see what the little white bugs were. The vet said it was
LICE! 
He mention that in his 10 years of being a vet he only seen two cases like this. (I'm guessing he means the type of lice?!) He had said the puppy got her from the breeder and I'm SURE she did cause my house does not have anything like this crawling around....He gave me some shampoo to give to Libbie in two days from the vet, which is today. . So when I get home that will be the first thing I'll do.
BTW. . . dog lice cannot harm human. And humana lice cannot harm dogs! Just had to get that out. . .
Although I am extremly upset with the breeder I got her from. . . . the only thing I really care about is getting the problem FIXED! My poor baby
. . . . shes in good hands now.