Officers conducting a raid of the restaurant on Wednesday morning discovered caged dogs in the kitchen, a decapitated puppy in the trash and the owner himself in the process of decapitating and butchering a canine carcass, putting the meat in a cooking pot.
Owner Yu Yu Chou told local newspaper reporters: 'I admit to killing the dog, but the meat is for my own personal use, not for my customers.'
Police received a tip-off from a restaurant client who heard the sounds of a howling dog at the back of the establishment.
After peeking over the back fence to investigate, the horrified client witnessed two cooks in the act of killing the defenceless animal.
Upon arrival at the scene, police officers said they witnessed the cooks hurriedly throw a decapitated dog carcass in a kitchen waste bin. Officers later saw the owner decapitating and butchering a dog in the back alley.
The restaurant, which advertises the quality of its 'home-style food' claims never to have received complaints of using dog meat before.
The owner, while handcuffed in the back of a police vehicle, said: 'We've had complaints from customers who have found hair, flies or cockroaches in their food, but never anything this serious.'
The AFN news agency took video evidence of the police bust.
It contains footage of a hair-strewn alley where the dogs were seen being butchered, a terrified dog chained to the wall and a forensics officer pulling a decapitated canine carcass – stiffened by rigor mortis – out of a kitchen waste bin.
The animals, some of which survived, were removed from the scene in a veterinarian's van. Samples of meat were also taken from the kitchen fridges in order to determine the origin of the meat.
Following local authorities' demands to investigate kitchens in other local oriental eating establishments, five other Chinese restaurants in the area did not open their doors to customers on Wednesday, leading many to question whether the cooking of dog meat has long been practiced in Tijuana.
In total five arrests were made at Mr Yu Yu Chou's restaurant, including three workers of Chinese nationality.
A spokesman for the Mexican Ministry of Health told local reporters following the incident that the city would be pursuing conviction of the Mr Yu Yu Chou, and that 'you can't play with the health of Tijuana'.
The infamous frontier town in Baja California state sits directly on the United States border, just three miles from downtown San Diego. The town has long had a dangerous reputation, not least for the criminal cartel activity which sees drugs and humans trafficked across the border into the United States.