STEP 1 - Lure the dog into a sit - say "yes" and reward when dog sits
STEP 2 - Say "sit", pause, make the same hand motion (as if you are luring the dog), but do NOT hold a treat in the luring hand - say "yes" and reward when dog sits
STEP 3 - Say "sit", pause and wait for the dog to sit - say "yes and reward when the dog sits.
STEP 4 - Generalize the behavior - work in different areas and reinforce with different reinforcers - i.e. access to another dog, going through doorway, toy, food, petting, etc.
STEP 5 - Increase distractions - this could be asking for a sit when the dog is excited or asking for a sit in the present of something the catches the dogs attention - food, squirrels, another dog, etc.
STEP 6 - Add in 1 additional dog at appropriate distraction level (for example, if dogs are rated as a 4 on the distraction scale for Fido, then you should only add in a new dog when Fido can do the behavior consistently for level 1 - 3 distractions).