The scroll's location.
The Magic Dragon is a silver reward scroll challenge from Black & White. It is located on Land 5, down the hill behind the wonder of the neutral Tibetan village (the one that is protected by Nemesis' Shield) near a mine entrance. It is available from the start, but way out of the player's initial area of influence to be completed.
In this challenge, a group of followers want to prove themselves to the player. To do so, they will enter a cave to fight and kill a magic dragon, retrieving the treasure kept inside in the process.
The Good Way[]
The player must help the followers. They are too tired to fight, and ask the player for healing. Comply,
The survivors present the player.
and they'll explain their plan: they want to fill the cave with smoke from a pyre to blind the dragon, but have no means of lighting it up. The player must then help the followers by casting a fireball on the pyre (taking care not to kill the followers).
The holes above will release smoke while the followers enter the cave. The player must listen to their progress by zooming on each of the holes in order and waiting until each dialogue section is concluded.
The survivors will exit the cave with the treasure and present it to the player.
Reward: A flock miracle dispenser.
The Evil Way[]
Simply kill the followers.
Reward: Nothing
Note: This way is highly unrecommended due to the relative difficulty of Land 5, which has villages with very high amounts of belief needed to achieve conversion.