Why is my younger puggle severely beating the older one, and how can it be stopped?

We have 2 puggles: the oldest is very pug like (Zoe), the other is younger and looks and acts like a beagle (Jill)... Both dogs sleep in my parents bed at night, and lay on the couch, which I hear is bad but I'm not able to stop what my parents let the dogs do... Jill is now a yr old, and if she is picked up too fast herself, or Zoe is paid attention to, Jill will walk over, growl at Zoe, and once both their fir is standing up, they stand up themselves and savagely beat eachother up, it looks like boxing... During this, they are more of a growl like kids screaming back and forth, and they literally bite eachother bodies apart for 30 sec to a min... Jill will always win, and as claiming her prize, she stands on top of zoe, digging her front paws into her back, and walks her paws up and down Zoes back for a few min, and her fur is up, and she digs into her deep!! If Jill is pulled off Zoe during this phase, the savage fight takes place all over again... Results to their bodies are one of the dogs limping for a day or so, teeth through an ear leaving a bloody hole, saliva on their necks and backs, etc. It has gotten to the point where Zoe is unable to sleep with my parents in bed, only Jill allows herself, and random attacks during the day over rawhides and little attention to either dog makes Jill attack Zoe. Zoe never instigates, but she defends herself in the fights. We have used dog sprays, like bitter apple and water, and it does not stop Jill during or even to stop a fight from occuring. Even though they are only puggles, friends and family jump when these fights occur, it's like they are literally trying to kill eachother and tear their teeth into their necks and standing and boxing so fast, it's a crazy site... Poor Zoe is innocent, and my parents are thinking of getting rid of Jill, the fights are about once a day, or 3x if Jill doesn't get her daily walk... Jill is also very nervous around other dogs, stands at a distance and barks, and wants Zoe near her, and when parents aren't home, Jill lays right next to Zoe the next day, as if they are best buds... This isn't a normal dominance thing, it's a psycho thing, why and what is Jill thinking, and how can it be stopped? We let them fight it out, said vet, but events continue to occur... Help!