  Dwarf galaxies are widely believed to be among the best targets for indirect
dark matter searches using high-energy gamma rays; and indeed gamma-ray
emission from these objects has long been a subject of detailed study for
ground-based atmospheric Cherenkov telescopes. Here, we update current
exclusion limits obtained on the closest dwarf, the Sagittarius dwarf galaxy,
in light of recent realistic dark matter halo models. The constraints on the
velocity-weighted annihilation cross section of the dark matter particle are of
a few 10$^{-23}$ cm$^{3}$s$^{-1}$ in the TeV energy range for a 50 h exposure.
The limits are extrapolated to the sensitivities of future Cherenkov Telescope
Arrays. For 200 h of observation time, the sensitivity at 95% C.L. reaches
10$^{-25}$ cm$^{3}$s$^{-1}$. Possible astrophysical backgrounds from gamma-ray
sources dissembled in Sagittarius dwarf are studied. It is shown that with
long-enough observation times, gamma-ray background from millisecond pulsars in
a globular cluster contained within Sagittarius dwarf may limit the sensitivity
to dark matter annihilations.
