Dogs roll in donkey poop. House smells like the barn. Will this work on the dogs and in the house?

Don't put this directly on the dog, or yourself. I got a drop on my wrist and it burned like heck. It;s best when put on the carpet or floor where the poop has been, after you clean it up. I believe the company makes other products for large areas.

I love to use wax melts and other good smelling products in my home. Will this overpower those smells as well or just neutralize the pet smell?

Because of your circumstances, use this with caution. Nilodor doesn't overpower offensive odors - it inhibits your ability to smell them - or anything else.A few drops of Nilodor in a restaurant dumpster is enough to completely mask the smell of garbage. It's that powerful. A single drop in a room will eliminate pet odors, or the smell of cabbage cooking, but will not completely blank out your sense of smell. A truly great product, used correctly. I hope this helps.

How exactly do you use this product? My son's puppy has made his bedroom smell like urine. Will this help? Do you just sprinkle this into the carpet?

A few drops, sprinkled around the carpet may help. However, this company also makes this item in a spray which might be more beneficial for your situation.

So what is in this magic liquid? What is the active ingredient?

unless the smell is famiiie, to know the active ingredient you would half to look up the MSDS (material safety data sheet) which they must file for each product. Some time active chemical is propietary, sometimes not.