From Webkinz Insider Wiki
Doug the Dog was introduced to Webkinz World on May 28, 2009. When Doug originally entered Webkinz World, he was glitched and would take all of a certain gem, instead of the single gem that he was supposed to. The first WI member to collect all 20 Doug the Dog Prizes was jerkymom, on June 16, 2009. Doug The Dog was once one of Arte's friends until he tried to steal gems. The whole story was published in the W Tales, and the book of this story will be avaliable in the W Shop.
How to Work With Doug
Our Gem Hunt article contains information about which gems are held in which mines. This is essential to being successful with Doug because, as you trade, you need to replenish your gems!
Doug is found in the Collector Room.
Our Clubhouse section on the Webkinz Insider Forum contains a thread with Doug's current location at any particular time. He is in each color zone once each day, and changes hourly. Please visit the Official "Doug the Dog" Tracking Thread for information on his whereabouts in Webkinz World.
Doug will first tell you that he is looking for a certain level of gem(s). At that point you can choose to trade with Doug, or, if you don't think you'll have gem(s) he wants, you can back out. If you back out, you won't get another chance to trade with that pet until tomorrow. If you agree to trade, Doug will tell you exactly what gem(s) he wants.
If you have the gem(s) he wants, he will give you a prize. If you don't have the gem(s) he wants, you'll get nothing. Doug gives out his prizes in the order shown below. He starts out asking for a common gem or two, and by the end he asks for multiple rare gems.
If you don't have the gem(s) Doug wants, the next time you trade with him and you DO have the gem(s) he wants, he'll give you KinzCash instead of giving you a prize. You'll have to trade with him one more time to get the prize you would have received on the day you didn't have the correct gem(s). This is why it's very important to make sure you have a good collection of gems before you try to trade with Doug.
You can trade with Doug each day with as many pets as you want, but Doug starts off each pet at the beginning of the list. You should only do this if you want multiples of the prizes. Also, you'll need an even larger collection of gems because Doug is going to burn through them even more quickly.
For current trade values, please refer to the (WIGEV)_Gem_Hunt_Prizes#Doug.27s_Prizes
For full -size images of these prizes, refer to the WI Picture Gallery