Fire-raising is less of a problem than one might imagine. All that is required is that the dragon can synthesize a liquid that can be stored in a gland, but which ignites easily when squirted out into the air. The range of possible liquids is great, and reptiles (and many other animals) are known to engender all kinds of unpleasant substances when excited or threatened.
The bombardier beetle (Stenaptinus insignis), for example, synthesizes a mixture of hydrogen peroxide and hydroquinone which, when the beetle is threatened, it releases into a ‘combustion chamber’ where enzymes provoke the two substances to react with each other, producing the toxic substance benzoquinone and a great deal of heat. The boiling hot liquid is then squirted with fair accuracy at the unfortunate assailant.
Copyright (1999) by Thomas Eisner and the National Academy of Sciences, U.S.A.