Hellhound is a demon that resides in Hell and is a "pet" of Satan (the Devil). In All Dogs Go to Heaven, Charlie has a nightmare in which he is condemded to Hell and is attacked by a Hellhound and several imps (deciples of the Devil). The creature then appears toward the end of the film to take Charlie to Hell but is defeated when Annabelle (the pink whippet) appears to take Charlie to Heaven instead. The Hellhound is by far the darkest character in Don Bluth media and it's not even the main antagonist of the film, but the tertiary antagonist.
Appears to be more of a Dragon more than a Hellhound from folklore, it's origin.