Forum:2 Questions about Sirius and Lily

I have two questions -

1. When does Lily find out about the guys transforming into Animagus? During the 7th grade year or after they left Hogwarts?

2. Does Dumbledore believe Sirius is guilty until his re-capture in PoA? Everything I read says that no one knew of the switch of the secret keeper except Peter, Sirius and James because Sirius had begun to even suspect Remus. But since Dumbledore sent Hagrid to pick up Harry, I would assume that he knew alot of things sooner than others. He seemed to accept the truth quite easily without doubting Sirus's innocence after he was recaptured. Was it just that he trusted Harry that much? Or had Remus convinced Dumbledore?