It is the second enemy fought during the boss fight, after the knight puppet, Sir Walter deGrey. As the Dragon and Dracula fight, the Toy Maker continues the story he began during the first phase of the battle.
From the Toy Maker: The treacherous Dragon Sauraganthorix, seeing the kingdom unprotected, decided to leave its lair to sow terror and destruction. The Dragon's breath was a blaze worthy of Hell itself! The evil invader had met its match. Hellish flames sprung from the Dragon's belly!
Sauraganthorix's appearance borrows heavily from the dragon customs used in the traditional Chinese dragon dance. The only difference between the two is that Sauraganthorix possesses a pair of wooden wings and arms.