Most dogs are spayed or neutered at 6 months old.
It can be done sooner but I would discuss it with your vet to see what they reccomend.
I would let the dogs get to know each other without you holding nacho, but do NOT leave them alone together until you are satisfied that the larger dog is not going to hurt nacho. Does cleo act OK with nacho? She has to learn to be respectful of nacho's small size and not step on him or play too ruff. If you don't let them get used to each other you may end up encouraging nacho to be afraid of her without meaning to.
Sandy, Koke and Lelaska's Mom