Not to be confused by Dragonfly, a third generation Badnik from Sonic the Comic Online.
Dragons are legendary creatures that make a brief appearance in The Legend of the Golden Axe story Plague of Serpents. Called to the aid of Queen Silpantia-Dragontamer and the entire Hammerynth caverns, the dragons smashed their way into the mourning mountains to fight off Cobraxis and his snake army. Leader Cloudburner greeted Silpantia warmly, suggesting it has been a long time since the pair last met. From the air, the dragons quickly tipped the fight in their favour, launching flame breath at their enemies and torching any snakes that managed to latch onto their tails. Cobraxis called upon the help of the Serpent God, transforming into his image and attacking Cloudburner, but Gilius-Thunderhead protected the cavalry with the Golden Axe. With the trouble over, Cloudburner happily told Silpantia that the dragons would help whenever she needed it.
Windscream is the only other named dragon of the group.
Mobius
It later became apparent that dragons also exist on Mobius. The Freedom Fighters were temporarily hiding in Tekno's Workshop (The Monster Wakes) after the destruction of Bob Beaky's Travelling Circus, but living quarters were cramped. Knuckles the Echidna was enlisted to dig them more tunnels, but an inspection by Shortfuse the Cybernik revealed they had woken a dragon a thousand years early from his hibernation. The team launched into a massive assault on the beast, proving almost incompetent against the huge threat. However, they soon discovered that the dragon was just cranky from being woken up and said it would contemplate joining the Freedom Fighters when it had properly woken up - in a few years.