Dragon

Dragon is a dangerous hostile flying red creature that spawn at lava level where they defend their nest.

Behavior
They are ranged creatures, usually flying away from attackers and shooting fireballs at their enemies.

Attack
The dragon fireball attack has an area damage and a important knockback effect. The damage value itself is irrelevant, if dwarfs have a minimum armor. It starts being annoying if there is a group of dragons attacking. The knockback effect though is extremely dangerous, especially if dwarfs are fighting near a lava hole and if many dragons hurl their fireballs more or less together. The knockback effect does accumulate and can sometimes throw dwarfs violently and directly into the deep lava, with no chances of saving them, even if in direct control.

Underground World
Dragons in the Underground World have a purple skin and have 50% more health. Aside from this, both (red and purple dragons) have the same statistics.

Farming dragons
Dragons can be very useful late-game, since they're sure to drop 3 coins, they spawn regularly and will never run out, they can be an infinite source of coin and consequently an infinite source of any resource that can be bought on shop.

Create shaft holes to the lava level so dragons can, from time to time, exit from there going up. Place a wooden hatch there so you can block the dragons way back to the lava. Also, placing hatches and using them properly allow you to fight one dragon at a time. If you can afford, an iron hatch is better as it can not be burned by the dragons' fireball. But the eventual fire on the wooden hatch isn't a big of a deal, as you can click on it and order "extinguish". Always remember to close the hatch before killing the dragon to avoid the loot falling down into the lava.