Strange wound on dogs paw pad; PLEASE help

Hello, my name is Ross. I don’t know where to go or what to do about this but i was hoping i could maybe get some questions answered.
I have about a 7 yr old blue nose pit bull. About 3 days ago i noticed a lot of blood on my sheets where my dog lays. I found out it came from the bottom of my dogs back right paw. There was about a 2-3 mm deep wound. Thinking it would just heal normally, i cleaned it up with hydrogen peroxide and antibacterial cream and left it at that. A few days later i checked the paw and it looked like it started to heal but now the 2-3mm deep wound is healed and there looks like a quarter-sized burn spot (the best way i can describe it). It looks like she stepped on a super hot object. Afraid that it was getting worse i would apply medicine and wrap it in gauze wrap and put a sock over her foot and tie it at the top. I did this so the wound can try and heal and not re-open every time i take her outside. (I did this twice, one each day.) At the end of the day when we go to sleep i take everything off so it can air out. Just now i went to take it off and her whole paw is swollen with lots of moisture (kinda smells bad, like yeast; she has had yeast problems in the past.) My cousin said it could be moisture dermatitis or something, but i don’t know. I am really afraid it’s something worse. Can a dogs paw get swollen like this really bad from a cut? If so, will it eventually go away naturally as long as i keep an eye on it? Should i wrap it or let it heal openly? I don’t have a lot of money cause i am a full-time broke college student lol so i dunno if i can take her to the vet. But if she needs it i will take out a school loan to pay for it, whatever the amount, i don’t care. Any help or wisdom on this matter would be the ultimate Christmas present. Thank you for your time! Merry Christmas.

-I took a quick picture of the wound in question. If you look closely you see a brown line in the center of the wound, i think that’s where the 2-3mm deep cut was. I just don’t understand how it turned from this cut to a burn-like wound.