Smarter dog's guarding excavated treasure (5)
I believe the answer is:
cuter
'smarter' is the definition.
(cute can mean smart or cunning)
'dog's guarding excavated treasure' is the wordplay.
'dog' becomes 'cur' (a cur is an aggressive or scruffy dog).
'guarding' is an insertion indicator (inserted letters are protected or guarded).
'excavated' means to remove the middle letters (the middle letters are excavated or emptied out).
'treasure' with its middle taken out is 'te'.
'cur' placed around 'te' is 'CUTER'.
(Other definitions for cuter that I've seen before include "Having raised appeal" , "More attractive" .)