I have read somewhere that your words and your body language have to agree for kids and dogs to listen to you. Try neutral eye contact, slow head shaking, and saying No, firmly but calmly. I have found it works on DH's crazy drunk squash teambuddies too.
My mom is a kindergarten teacher and she says that you have to start very strict while they are still fresh, relax it only after two days, before you become friends. She says that they actually want discipline and when they act up, it is because they crave more structure.
Never yell, and never cry, it is very hard to come back from that.
Hang on to your sense of humour and sense of enjoying the little horrors..there is a lot to enjoy.
She says to be very strict with the bully, but to love him to bits, they melt when they get love.
This is not my knowledge, it is my mom's..hope it works
Lots of best wishes and blessings.