dog aggression toward cats

Question
i adopted a Dobie from the pound that is not supposed to cat aggressive. I have two cats. He got sick when we adopted him and was hospitalized with pancreastis. Since he is well,my cats can not even come into the hall from the gated bedroom or socialize with us at all w/o being chased back under the bed. We have tried holding him but he gets very agitated and excited. He is such a sweet dog and I really don't want to have to give him away.My cats are terrified and miserable.When they are laying on the bed he ignores them but I think he smells them when they even come in the hall. Needless to say his hospitalization was very expensive and he is on a special diet so my husband has about had enough,and is not willing to put of money and effor into training. Any suggestions?
There has to be a way for these guys to coexist ,I love both my dog and my cats.
Thanks

Answer
If you decide that this dog is not ok for your household, please do not take him back to the pound - there are Doberman rescue groups that might help you, since you seem to have been mislead about his safety with cats.  Do you know if the pound evaluated him with an unknown cat, or did the dog formerly live with cats?  That makes a difference.  Some dogs willingly share a household with cats that they have known since puppyhood, but do chase and harass cats that they are unfamiliar with.  If you scroll down, this page has some links about living with dogs and cats in the same household.  http://www.wonderpuppy.net/canwehelp/1others.php
Even if this problem had not arisen, your dog should undergo training with you and your husband so that he respects your cues.  Free site you may want to check out: www.clickerlessons.com.  You can get away with five bucks for a clicker, and whatever treats you use, so it isn't expensive to get started.  Positive training is ideal for do-it-yourselfers, as it's hard to ruin the dog!  In the meantime, make an effort to give your cats plenty of room to hide.  You can keep your dog on lead when the cats are loose in the house - and what I would do is feed the dog bits of roast beef, or other high value treat, when the cats come into the room, stop feeding when they exit.  Eventually, the dog may welcome the cats being in the same room and not "disappearing".  (Classical conditioning)