Wordorigins.org

There are many stories about the origin of the term hot dog, most of them false. First, let’s start with what we know.

The first known use of the term is in the Yale Record of 19 Oct 1895, which contains the sentence:

They contentedly munched hot dogs during the whole service.

Two weeks earlier, on 5 October, that same paper recorded a poem, Echoes From The Lunch Wagon:

‘Tis dogs’ delight to bark and bite
Thus does the adage run.
But I delight to bite the dog
When placed inside the bun.

The hot is obvious, but why dog? It is a reference to the alleged contents of the sausage. The term dog has been used as a synonym for sausage since at least 1891 when Farmer & Henley’s Slang And Its Analogues glosses it as university slang for sausage. And jokes about dog meat and sausages are many decades older than this.

Perhaps the most persistent false story about the origins of hot dog is the one concerning sausage vendor Harry Stevens, cartoonist T.A. "Tad" Dorgan, and the famed Polo Grounds of New York. According to myth, c.1900 Stevens was selling the new type of snack at a New York Giants game. Dorgan recorded the event in a cartoon, labeling the sausages "hot dogs" because he didn’t know how to spell "frankfurter." Other variants have Stevens naming the delicacy and Dorgan recording it. Unfortunately, the dates don’t work; the 1900 date for the incident at the Polo Grounds is after the term was coined. Also no one has found the Dorgan cartoon in question. There is a 1906 Dorgan cartoon featuring hot dogs at a sporting event, but besides being even later, it is a reference to a bicycle race at Madison Square Garden, not a baseball game at the Polo Grounds.

The use of hot dog to mean skilled or proficient is unrelated to the sausage. In a bit of linguistic coincidence, this usage also appears in the 1890s. It first appears in 1894 in the sense of a well-dressed college student, a clothes horse. From the University of Michigan’s Wrinkle of 18 October 1894:

A Suit of Clothes, great wonders wrought.
Two Greeks a "hot dog" freshman sought.
The Clothes they found, their favor bought.
A prize! The foxy rushers thought.

This usage is probably a variation on the older expression putting on the dog. From Lyman H. Bagg’s 1871 Four Years At Yale:

Dog, style, splurge. To put on dog, is to make a flashy display, to cut a swell.

It quickly moved from this sense of suave sartorial splendor to proficient, accomplished and eventually to its modern association with extreme sports and risky action.

(Sources: Origin of the Term Hot Dog, Gerald Cohen, Barry Popik, David Shulman, 2004; Historical Dictionary of American Slang; Oxford English Dictionary, 2nd Edition)