An Australian dog owner has been left shocked and upset by brutal threats to kill her missing dog.

Baxter, a 3-year-old staffy cross, was last seen on New Year's Eve.

The dog's owner was already distressed enough about the disappearance of her four-legged friend but an anonymous phone call has only made matters worse.

The owner told 7 News she came home to find the screen door pushed off. At first, she assumed Baxter and another dog had been scared off by fireworks. She offered a $500 reward for the dog's return.

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A phone call from an anonymous number initially brought some hope but quickly turned sour.

It started off with the people saying they'd found Baxter.

"They said 'we think $1500 is fair for you to get your dog back otherwise you'll end up with half a dog'."

The person on the other side of the line also demanded to receive the money late at night and at a cemetery.

The dog owner believes the phone call was nothing more than a prank but the whole family was left distraught by what happened.

The RSPCA called it a "pretty low" act.

Baxter still hasn't been found.