So my normally very gentle dachshund is suddenly pretending to be a pitbull. Normally Z LOVES children but now he has started barking and chasing them. He has a heck of a bark for little guy. Also when my friends come over he goes insane barking and growling and once we get him calm from that, if they try and leave, he starts up again. What did I do wrong? I have been thinking of adopting another one from a rescue since we just bought a home with a fenced in yard but now I am wondering if that is still a good idea.

How old is the dog and is he neutered? An intact male dog just coming to "social maturity" which generally happens around 1-1/2 to 2years old is the most likely to develop delusions that he owns the world and everything in it. Neutering usually helps, but the earlier the better.
Enroll him in a local obedience class if you can find one, it helps cement in his mind that you are the pack leader, and helps you learn how to do that.
Did he possibly have a bad experience with a child recently (including neighbor children who may have teased him through the fence)? Be very careful that he is supervised around children, and that they are not allowed to run or make a lot of noise that would trigger aggression/chase instinct.
When guests come over, have them totally ignore the dog... no speaking to him, no eye contact. If he comes over to them in a quiet and proper manner, they may speak to him and pet him briefly. The same when they leave; no big fuss of goodbyes at the door and no acknowledgement of the dog.
Obviously, if he is actually biting them, he needs to be on a leash when people come to the door. If the tough guy act doesn't get him any attention, he is more likely to give it up.
Behavior that gets rewarded gets repeated.