The Bone Dragon appears as two enemies: one is purple, the other is green. They both appear in the Subterrane. If the green version is attack with a magic spell, it will retaliate by casting Death on a random party member.
The Bone Dragon appears as an enemy in Drakenvale. It is part of the fixed encounter in which the player obtains Golem, but can later be found as a standard random encounter. It can use Bone to reduce a part member's HP to single digits. It can be harmed by curative magic and items.