s69-5 said:
Attack it twice, then move south.
Attack it once, then move south.
Attack it once then move west (into the ice room)
It will see its own reflection, blow fire at it and it will melt the ice.
This will engulf the dragon, defeating it and allowing you to pass through to both the Dragon's Lair and the Lava Room.
Cookie for anyone who can tell me what game this is from?
Since no one has got this yet, maybe a few hints are in order:
You begin the game with a lamp and an Elvish Sword that glows blue when near danger.
If you wander around in the dark, you are likely to be eaten by a grue.