In a 6th Century kingdom near the River Ur, the town of Urland is being terrorized by Vermithrax Pejorative, a 400-year-old dragon. King Casiodorus (Peter Eyre) sacrifices virgin girls twice a year. A young man named Valerian (Caitlin Clarke) seeks help from Ulrich Cragganmore (Ralph Richardson), the last sorcerer. Valerian’s expedition is trailed by Tyrian (John Hallam), the brutal captain of the King’s Royal Guard. When he  confronts the wizard, Ulrich invites Tyrian to stab him to prove his powers and he dies instantly.

The wizard’s young apprentice Galen Bradwarden (Peter MacNicol) and servant Hodge (Sydney Bromley) are horrified. They cremate the wizard’s body and place his ashes in a leather pouch. The wizard had ordered that his ashes be spread on a lake of burning water. Galen is selected by Ulrich’s amulet to be the next wizard and he journeys to Urland, discovering on the way that Valerian is actually a young woman trying to avoid the sacrificial lottery. Tyrian tracks and kills Hodge and before dying Hodge hands the ashes to Galen.

In Urland, Galen seeks out the dragon’s lair and seals the cave mouth with a landslide, thinking he has solved the problem. But Tyrian arrests him and takes him to Castle Morganthorne, where King Casiodorus rules, The King guesses that the young Galen is not a real wizard and declares that Galen has merely angered the dragon, not killed it. The King takes the amulet and throws Galen in the dungeon. The King’s daughter, Princess Elspeth (Chloe Salaman) visits him there and is shocked at his accusation that the lethal lottery is rigged, as the children of the rich and powerful are passed over. Meanwhile, Vermithrax Pejorative escapes and causes an earthquake. Galen escapes from the dungeon but no longer has the amulet. The local priest, Brother Jacopus (Ian McDiarmid) leads a group to confront the dragon but he is incinerated and the dragon burns the village of Swanscombe.

When the lottery takes place, Elspeth rigs the draw so that she is chosen. Distraught, the King returns the amulet to Galen, hoping he will save Elspeth. Galen uses it to enchant a powerful spear forged by Valerius’ father known as the Dragonslayer, which may pierce the dragon’s hide. Valerian gathers dragon scales and fashions a shield. Valerian is now known to be a girl and is eligible for the lottery. She is jealous of Princess Elspeth, but Galen tells her he has fallen for Valerian herself.

Trying to rescue Elspeth, Galen fights Tyrian and kills him. But the Princess descends into the dragon’s cave. Galen follows and finds young dragons feasting on her corpse. He kills them and wounds Vermithrax, but the spear is broken. His shield protects him from incineration. Valerian convinces Galen to leave with her, but the Amulet gives Galen a vision concerning the wizard’s wish to have his ashes scattered on burning water, as there is burning water in the dragon’s cave. The wizard had planned all this.

Galen returns to the cave and spreads the ashes on the burning water. The wizard is resurrected inside the flames and transports himself to a mountaintop, summoning a storm, and confronts Vermifrax. It flies away with the wizard. Galen crushes the amulet with a rock. The wizard’s body explodes and kills the dragon. Later, the villagers credit God with the victory. The king drives his sword into the dragon’s remains and claims the glory. Galen and Valerian leave together. He wishes they had a horse and one appears.

The film was directed by Matthew Robin from a screenplay by him and Hal Barwood. It was a Paramount/Walt Disney coproduction and the violence, adult themes, and brief nudity surprised many. It was the first ILM picture outside of Lucasfilm. It was nominated for an Oscar for special effects but lost to Raiders of the Lost Ark and for best original score but lost to Chariots of Fire. The screenwriters were inspired by the Sorcerer’s Apprentice sequence in Fantasia and the story of St. George and the Dragon. Peter MacNichol appeared in a full-frontal nude scene. This was his first film. As he told the interviewers, he had grown up riding horses and had learned tumbling, foil, saber and dagger fighting. Also: juggling and magic tricks. They decided he was perfect for the role. Caitlin Clarke said she learned more about acting in one scene with Ralph Richardson than she had in years of acting classes.

The castles were in North Wales and an entire medieval town was built for the film. It rained nearly every day, but that made the foliage preternaturally green. The costumes were designed by Anthony Mendelson with the help of the British Museum and the London Library. The score was written by Alex North, including music that had been rejected by his score for 2001. Marvel published three comic books based on the film. Vermithrax Pejorative (Best name for a dragon, ever!) means Worm of Thrace Which Makes Things Worse. The design was based on the Jurassic Pterosaur Rhamphorynchus, with a jaw like a rattlesnake and chicken feet. It was 40 feet tall and consisted of 16 puppets. They used real World War II flame-throwers for the dragon’s breath.

Phil Tippet used his Go-Motion technique to animate it. This is like Ray Harryhausen’s stop motion, but the frames are taken as the model moves instead of when it is still between moves, and that creates motion which is less jerky. It used up 25 per cent of the film’s budget. The dragonets were hand-puppets and designed not to be cute, with small eyes and faces like bats crossed with bulldogs. The flying dragon was operated by radio, cable controls, air bladders, and levers. Guillermo del Toro said it was his favorite movie dragon along with the animated one in Disney’s Sleeping Beauty. George R.R. Martin said it was the best dragon on film with the coolest name. The landscapes and the dragon overshadowed the acting and the story somewhat. Peter MacNichol neglected to put the role on his C.V. but I think he acquitted himself well.

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