He will sit by the cage for hours because Dash is prey and he's watching him. It's not a "play" instinct, it's a hunter's instinct. My chins used to be in my bedroom, where my dog and cats all slept. I was lucky to never have a problem, but my cats also ignored the chinchillas and were taught early on that the cages were not perches and resting spots with spray bottles.
Now, the chins are in the basement. The husky will follow us down when somebody goes down there, but once he starts showing an interest in the chins rather than just hanging out on the side with the TV, he is promptly chased back upstairs. Do I think he'd hurt them intentionally? Yes, and no. At first, to him, they are moving, living, toys he just wants to play with. But from there, it turns into a snack. We learned that once already, when he managed to get into the basement unattended and killed one of my girls.
I have another dog, who I don't think would hurt them and shows little to no interest in them, but I still don't allow the chins out when she's around, and certainly wouldn't let her just sit in front of the cage. When we are in front of the cage, chins get a different interaction from it. Food, treats, attention. When a predator sits in front of the cage, it's a whole different scenario. Would you want to be stalked?