I have to say, the dialogue between the dragon and Lily is the highlight of the story. Their banter, with the dragon cutting off the conversation to point out continuity errors, is pretty funny.
I also like how the dragon is casually introduced. The first half of chapter 1 starting out really serious about self discovery then all of a sudden she just starts talking up a dragon without any build up.
Going through the first movie with a different perspective is also pretty neat as well.
I get the feeling that there isn't going to be a significant outcome to this story in a humorous way.