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Well I think there are several reasons why Carface seemed less active in the second movie. First off he didn't have the "crew" he had in the first movie, so there really wasn't anyone to support him. Second since he and Charlie were dead in the second movie and they didn't have their gambling business, his goal in the first movie was pretty much done. And third, since he was the one that had to follow orders instead of giving them he didn't get to do as many of the important parts as the "leader" normally does.

yeah i totally agree with you guys carface got less evil after the first movie. i mean come on taking orders from red? just like david said to me "what kind of dog are you? taking orders from a cat" i mean seriously.

Bingo. All Dogs 1 is ultimately a musical mafia drama with supernatural elements (which wow what a strange mix.) All Dogs 2 is a musical comedy with some drama elements. Their writing is well suited for the kinds of stories they sought to be, but they're so separate from each other that it's hard to follow one up with the other and make it, like, actually satisfying.