Dragonfire was the fourth and final story of Season 24 of Doctor Who. It marked the departure of companion Melanie Bush, the return and final appearance of Sabalom Glitz, and featured the debut of Sophie Aldred as Ace.
Iceworld is a space-trading colony on the dark side of the planet Svartos. It is a mysterious place of terror and rumor, ruled by the callous and vindictive Kane. He buys supporters and employees and makes them wear his mark iced into their flesh. Kane’s body is so cold that one touch from him can kill. In his lair is a vast cryogenic section. Mercenaries and others are frozen and stored, their memories wiped for a future unquestioning army. Kane stays there when he needs to cool down. There is also an aged sculptor carving a statue from the ice.
The TARDIS arrives in a refrigeration sales section. The Seventh Doctor and Melanie Bush meet their roguish acquaintance, Sabalom Glitz. He owes Kane money and if the doesn’t return them soon he’ll loose his ship. Glitz has come to look for a treasure guarded by a dragon in the icy caverns beyond Iceworld. Glitz has a map he won from Kane in a gamble. Kane wanted him to have the map because he wishes to use Glitz in his own search for the treasure. The map has a tracking device in its seal. Kane has Glitz’s ship, the Nosferatu, which he orders destroyed. Not knowing he is being used, Glitz goes off with the Doctor in tow. Women are not allowed on the expedition so Mel stays with a waitress they have met, called Ace. Ace behaves appallingly to customers (pouring a milkshake on a customer’s head) and is fired. Mel is stunned to hear Ace is a human from late twentieth century Earth who only arrived on Iceworld when a chemistry experiment caused a time-storm in her bedroom.
Ace and Mel blow up an ice block and are arrested. They are interrogated by Kane, but Ace uses nitro-9 and they escape. As they run down the corridors, they encounter the dragon.
The Doctor, separated from Glitz, climbs over a parapet. He loses his grip, and hangs from the railing, holding onto his umbrella.
The dragon shoots laser beams at Mel and Ace. They realize that the dragon isn’t real and run away. Glitz arrives and helps the Doctor to the bottom of the chasm. Glitz wants to head for his ship, and gives the map to the Doctor. Kane overhears them.
Kane’s staff are not happy. Once they have taken his coin they are his for life, as Ace knows when she rejects an offer. Officer Belazs was not so clever. She is keen to escape. She arranges for the Nosferatu not to be destroyed, hoping to use the craft to escape. When this fails, she tries to persuade Officer Kracauer to help her overthrow Kane, but he is one step ahead. Their attempt to alter the temperature in his chambers and kill him fails. Kane kills them both. The same fate awaits the ice sculptor who has finished his statue of a woman called Xana.
In the ice caverns the Doctor and Glitz find the treasureless dragon. It is a biped which does not breathe fire. It fire lasers from its eyes. Mel and Ace have ventured into the caverns too. They meet their allies and are defended by the dragon, which guns down Kane’s cryogenically altered soldiers sent to kill them. The dragon takes them to a room in the ice. It is some sort of control area. There is a pre-recorded hologram message. It explains Kane is half of the Kane-Xana criminal gang from the planet Proamon. When the security forces caught up with them, Xana killed herself to avoid arrest. Kane was captured and exiled to the cold, dark side of Svartos. It seems Iceworld is a huge spacecraft and the treasure is a crystal in the dragon’s head. It is the key Kane needs to activate the ship and end his exile. The dragon is both Kane’s jailer and his chance of freedom. Kane overhears through the bugging device on the map.
Kane sends his security forces to the ice caverns to bring him the dragon’s head, offering vast rewards for bravery. He also orders his army to cause chaos in the Iceworld shops, driving the customers towards the docked Nosferatu. When the Nosferatu takes off, Kane blows it up. The only survivors are a young girl, Stellar and her mother, who have become separated. Shortly afterward two of Kane’s troopers kill the dragon and remove its head, but are killed themselves.
The Doctor has realized that Kane has been a prisoner on Svartos for millennia. He retrieves the dragon’s head. He is told Kane has captured Ace but is willing to trade her for the “dragonfire”. The Doctor, Glitz and Mel go to Kane’s private chambers for the exchange. Kane rises to the Doctor’s taunts but still powers up Iceworld as a spacecraft. It rises from the surface of Svartos. However, when Kane tries to set course for Proamon to exact his revenge, he realizes he has been a prisoner so long the planet no longer exists. In despair, he opens a screen in his ship and lets in light rays, which melt him.
Glitz claims Iceworld as his own spacecraft, Nosferatu II. Mel decides to stay with him to keep him out of trouble and tells the Doctor that Ace doesn’t wish to return home. He promises to take her home to Perivale: via the “scenic route”.