Dortmund might have a really big difficulty in retaining the second spot in the standings this season. I don't even talk about their leadership possibility because there is no way either Dortmund or the rest of the teams can catch up with Bayern Munich that easy. Dortmund have really tough opponents in top 4. Their form so far hasn't been impressive honestly.
Dortmund's previous performance did look less impressive, but there is still a possibility for Dortmund to make their appearance or performance even more impressive in the second half of this season or in the remainder of this season after the completion of the Qatar world cup. Because every team including Dortmund can target the best players in the transfer market in the near future and can evaluate the mistakes of their previous strategy to fix them for the better before the season ends.
They lost like the half of their games in the league so far. They have been competing in the Champions League as well on one hand maybe. But they should still be able to keep two tournaments balanced to have a decent season.
As for the Champions League, I'm a little less sure of Dortmund because there have much tougher opponents than in the Bundesliga this season. So the possibility of surviving and continuing to compete in the Champions League is very small, although it is still too early to conclude now as you said above on Dortmund's performance.