There is a "secret" side quest to fight the Dragon.
You need to find some item to repare the "spyglass" at Ghart's house.
Here a spoiler to the quest don't read it if you want to find it by yourself.
1. First Step go outside the village, at "festinroi" it's the french name of the village where Horace live when he wasn't in the village. Search in his house, the Kennel of his "Dog" Karen for some biscuit. His dog is actually his Scarecrow Who is in the village.
2. Go give the biscuit, you'll have a key to open a cage where the "extractore" is. It's in the toilet of the Demon's sexual dungeon in the village, during the night you can access to two door, one of them have the Item.
3. Then you need to replace the glass of the spyglass, there is some at Grant place in the castle.
4. Replace the glass un Ghart's house, a New place is unlocked during the night.
Prepare yourself to fight.