A hot spot is a localized area of skin inflammation and infection. The infection can be superficial or deep. Other common names for this condition include: moist dermatitis, pyotraumatic dermatitis, and acute moist dermatitis. Broken down, "pyo-" refers to "pus", "-traumatic" refers to self-inflicted trauma of biting, licking, scratching, and so on, and "dermatitis" means inflammation of the skin.
These common skin lesions are usually caused (and made worse) by biting, licking, or scratching. The important thing for successful long term treatment of a hot spot is to find the underlying cause to break the cycle of continued skin trauma and resulting inflammation.

Redness, oozing, pain, and itchiness are hallmark signs. Hair loss is commonly present. Sometimes hair can mat over the lesion, obscuring the size and degree of the problem. These lesions can appear suddenly, and grow rapidly in size. It is common for an owner to notice a small area of inflamed skin in the morning (perhaps an inch or couple centimeters in diameter) and come home from work to be met with a large area the size of the palm of a hand. The dog is usually highly agitated, and will not leave the area alone. Some dogs will even growl or snap if the area is touched.

There is usually an inciting factor to initiate the extreme licking and scratching behavior. Look for fleas, mites, or other external parasites, an insect sting or bite, allergies (food, inhalant, contact), or injury (skin wound, scrape, etc.). Some animals have been known to "start" a hot spot out of boredom or stress-related psychological problems.

By Janet Tobiassen Crosby, DVM, About.com