We first glimpse him disguised as a mortal captain.
Later, he sheds the disguise and reveals himself as the monster he is, ready to tear Prince Felix apart.
He will choose his own chains.
The yellow-eyed dragon is the first dragon from the Village who finds Una after her transformation. I wouldn’t say he “befriends” her exactly, since dragons are too self-absorbed to have friends as such. But he takes on the role of her teacher in these early days of her change. He calls her sister when he sees what she is, continuing the notion of kinship that the Dragon began when he declared himself her Father.
Una and the yellow-eyed dragon have an interesting little exchange early on.
“Have you a name?” the yellow-eyed stranger asked.
“No,” she answered.
“Neither have I,” he said.
Later on, when Aethelbald penetrates the Village, the yellow-eyed dragon pushes his way through the crowd to stand face-to-face with him. He greets the Prince of Farthestshore.
"Hello, Diarmid,” Aethelbald replied.
“What do you call me?” the yellow-eyed boy snorted. “Is that a name?”
“It is your name.”
“Funny thing, that. No wonder I forgot it.”
This is one of the many side-effects of becoming a dragon, it would seem. You’ll notice with Una herself that the longer she is a dragon, she loses her name. Even the narrative ceases to refer to her as “Una,” but simply calls her the dragon girl. Her identity is lost in her fire, in her own self-absorption.
The same thing happened to the yellow-eyed dragon, only so long ago now that he no longer even feels pain when reminded of who he once was. He is lost in his fire and bitter toward the Prince who, we discover, tried to save him. It is through the yellow-eyed dragon that we get the first hint of Una’s eventual rescue.
“This is the Prince of Farthestshore, my one-time master of yore!” He spat the word with a spark of fire. “The selfsame master who, five hundred years ago, tried to undo the gift our Father bestowed upon me. He tried to quench my fire!”
“He offered to help me too, long ago. I was young and foolish then, frightened at first by the change worked in me by our Father. And he, my noble Prince, my master, set his servants upon my trail, and they tracked me down until I was too weary to flee. Then he came to me himself. He came to me, claiming that he wished to help me. Hounded down, exhausted, I agreed to accept his aid and made myself vulnerable before him, swallowed my flame. But you know what he did? . . . You know what he did, little princess? He took out his sword and tried to run me through. I submitted to him, and he tried to kill me! I trusted him, and he betrayed me!”
So now we know what will happen to Una if she gives in to the Prince of Farthestshore and allows him to help her. She will have to die. All her selfishness, all her pride, will have to put to the sword. What a terrible price to pay for freedom, the loss of yourself!
It was a price too great for Diarmid. So he refused Aethelbald’s gift and remained the yellow-eyed dragon. He chose his own chains, clinging to self-will, even though he knows it will eventually cost him everything. He would rather die by the Dragon’s viciousness than by Aethelbald’s kindness.
Of course we know what follows for Una. In the end, she makes the hard choice and trusts Aethelbald. So she knows what the yellow-eyed dragon perhaps will never experience: Freedom from herself. She experiences the joy of living for love of others, of living a life so much bigger than the tiny little world of her own woes and hurts and frustrated dreams.
We don’t know what will happen to the yellow-eyed dragon, however. He is one of the many little mysteries that Heartless never completely unravels. But his story is not complete just yet. He has one more role to play before his end . . .