Rex attacks dengar and asigns him suppresive fire,

Then dengar takes his revenge shot.

Is supressive fire removed.

I assume yes but not sure if this counts as declaring rex a target .

Yes, it counts as declaring a target. Take a look at the attack flow chart in the FAQ, if you are resolving an attack ability which triggers after attack, it brings you back to the declare target step. It even specifically mentions Dengar as example.