Desensitization. Yes, like "behavior" you've probably heard this word used in dog training discussions, but it is frequently misused. Desensitization is the gradual exposure to something a dog is frightened of. Over time, the dog habituates to the stimulus and no longer exhibits fear.
When desensitizing your dog, think quality, not quantity. In other words, if your dog doesn't like strangers, taking him to the local street fair is not going to help him "get used to" strangers faster.
If you are afraid of birds, locking you in an aviary isn't going to turn you into a bird lover. This approach is known as "flooding" (sometimes referred to as immersion therapy) and is no longer considered ethical in the treatment of human phobias because of the high risk of *sensitizing* the individual, making them more afraid.
When it comes to desensitization, dogs need to be exposed at a level that doesn't trigger a fearful or aggressive response. Only the dog determines what that level is. Just because you think he *should* be okay with dogs at a certain distance or intensity, doesn't matter. In order to successfully desensitize a dog, we have to listen to what our dog's behavior is telling us about their comfort level.
The next step would be to decrease the distance or increase the intensity just enough that the dog is aware of it, but doesn't show signs of stress at that level. Gradually, systematically, this process is repeated until the dog no longer exhibits signs of stress in the presence of the stimulus.
While pure desensitization can work all on its own when done correctly, most dog trainers speed the process by pairing it with counter-conditioning, which is the process of pairing the scary stimulus (still at low levels) with something that provokes the opposite reaction - this is why food is so valuable in behavior modification.
Listen to your dog. If something in the environment is provoking a reaction, you are not practicing desensitization. Get your dog out of that situation and re-evaluate your plan!
If you haven't already, be sure to check out the Fearful Dogs FB group for more information and great discussions about desensitization and counter-conditioning.
P.S. My apologies for the bad meme reference (Google: Don't taze me, bro!), but it struck me as funny and, when dealing with behavior problems, we need a little humor now and then).