Children were dancing at the Wilson's Arms in Leeds on Sunday when a masked killer walked through them and opened fire on David Nelson, 38.
Mr Nelson, a former rugby league player who played for Sheffield Eagles and Castleford in the early 1990s, was dead on arrival at hospital.
Joseph Montgomery, 39, from Coulton in Leeds, who was critically injured in the shooting, died in hospital on Monday.
Mr Montgomery, known locally as Jock, threw a beer glass at the killer in an attempt to intervene and was shot in the head.
At a police news conference on Monday Detective Superintendent Eddie Hemsley said: "We will not tolerate this kind of violence on the streets of Leeds."
A children's disco is held every Sunday lunchtime at the pub in Seacroft and this week's event was combined with a 10-year-old boy's birthday party.
'Get on floor'
One mother, whose daughter was at the party, said: "The DJ spotted him and shouted at him to get out, saying 'there are children in here'.
"Then the kids were told to get down on the floor.
"There will be a lot of people affected by all this."
Then, he suffered minor injuries and the incident was not reported.
After Sunday's shootings, the masked killer ran to a car and got in the passenger seat.
The driver, whose face was also covered by a balaclava, drove away at speed.
'Cold-blooded killings'
The two dead men were both regulars in the pub and lived nearby.
At the news conference Mr Hemsley said: "We aim to catch those responsible for this cold-blooded killing as soon as possible.
"A motive has not yet been established," he added.
Chief Superintendent Andrew Rennison said: "This was a callous murder.
"We will be stepping up high-visibility patrols in the area."
There has been a series of fatal shootings in Leeds in recent months.
In May, the chairman of the Police Federation said many inner cities, including Leeds, had become virtual "no-go areas".