Fafnir

[Dragons in Legend]
(in some versions I have read Fafnir and Regin were giants or ordinary people. However the most common version I read was that they were dwarves.)
One upon a time there was a miserly dwarf. He had a vast hoard of golden treasure, which carried more wealth than any other treasure in the land. He had no plan to give it to anyone, and because his race could live for centuries without aging much he was going to keep the hoard all to himself for millions of years, until one of his two sons killed him.
As he died the ancient dwarf cursed the treasure, so that the son who killed him would in turn be cursed. Fafnir, however, could not care less about the curse.
Once he acquired the huge hoard he became paranoid, and moved the hoard to a remote place called Gnitahead.
A few decades later, Fafnir's brother, Regin, was working for King Alf of Denmark. 
The last Volsung warrior king (Sigmund) had died a few years before, so his wife, Queen Hjordis, remarried and came to live with King Alf, taking the son from the first marriage, Seigfried, with her. King Alf was a good king, and loved both his own children and his step-son. Seigfried's warrior/viking/king blood made him a natural leader, but as he had none of King Alf's blood in him he could never be his successor. 
The sad thought that he would never take the throne had probably never crossed Seigfried's mind. However, the Regin who was working as some sort of teacher (who was also a handy craftsman) planted the idea into Seigfried's head that his brothers would become effortlessly famous while Seigfried would fade from history... Unless he did something brave, something very very brave.
Regin told Seigfried that there was a mighty dragon in the land of Gnitahead that guarded a vast wealth of treasure. The dwarf promised to help Seigfried, and even fixed Sigmund's (Seigfried's real father) broken sword, Gram.
So with the dwarf encouraging him and the mighty gleaming sword in his hand, Seigfried set forth to Gnitahead. When they arrived outside the cave they waited around to observe the dragons habits.
The dragon was a great lindworm (serpent-like, two legs) and had once been the dwarf Fafnir. The curse of the treasure had transformed him into a symbol of his own greed. he seldom left the hoard, unless he wanted to drink by the river.
Regin told his plan to Seigfried and together they dug a pit on the worn track between the dragon's cave and the river while the dragon slept. Seigfried hid in the hole while Regin covered it with branches. in the morning the dragon slivered out and made his way to the river. As he passed over the hole Seigfried stabbed its unprotected underside. Fafnir roared in pain, but soon died.
Regin was delighted that the dragon was dead, and soon asked Seigfried to remove Fafnir's heart (only Seigfried had a sword at the time) so that he could eat it. Frowning in confusion at the dwarf's odd request, Seigfried hacked the heart out and passed it over. Some of the dragon's blood dribbled onto his hand, so he licked it up (YUK!) and suddenly he could understand all languages, human or otherwise.
The birds in the trees above him started yattering away, and told him that Regin had told Seigfried to slay Fafnir because Regin and Fafnir had been brothers, and the dwarf wanted all of the dragon's treasure. Now that he had what he wanted, the dwarf was planning to kill Seigfried. As the dwarf had not eaten the heart yet he could not hear the birds giving his plan away, and was caught unaware when Seigfried beheaded him with Gram.

Notes:
Apparently in some versions of the story the treasure hoard is The Otter's Ransom. Anyone with a spiffy knowledge of Norse mythology will remember the pickle Loki, Heimdal and Odin got themselves into when they killed and ate an otter only to find it was somebody's son, who had the shamanic power to transform from human to sea otter to aid himself in hunting for his family. Loki then had to go and get enough red gold to fill and cover the skin of the otter to release his fellow Gods who had been captured for revenge. 
There are many stories about the magical properties of dragon blood, I should write more posts about them.