save two friendships?

don't do anything rash, have you ever considered that's just her personality? many girls (myself included) tend to have people assume we are flirting because we keep eye contact and smile/laugh a lot, maybe she just really friendly. I suggest making it really clear to her that you aren't interested, so when shes around tell her abiut this really hot girl you met the other day and get a little graphic on what you wanna do to her (make believe or not this will get a reaction) if she continues it probably just her personality, if she stops for a bit then starts again shes probably flirting. so tell your other friend something sutle because he may get defensive like "hey "sarah"(or whatever her name is) has been acting a bit weird around me can you ask her if anythings going on?" this way you haven't accused anyone of anything, when he mentions it to her she might fess up or if he says nothing, now the notion is in his head he will start to pick up on the flirting himself and be able to make his own choices from there.

The key is to act clueless, no one can blame you for not understanding right? you were just concerned for your friends.