So the movie is similar to tremors but its not tremors. The creatures are not worms but instead they look like 2 legged skinless dogs. They have 2 legs only and a mouth. The setting takes place in the desert in a smile town. Let me know.
If you know, email it to me at >Removed<

It could be the sequal Tremors II: Aftershocks (1996) (V) (http://www.imdb.com/title/tt0114720/)
In this movie little two legged creatures come out of the bodies of the original creatures.