The Steve Dragon is Steve's alter ego as a dragon. He is a minor but recurring character.
The Steve Dragon has got the shape of The Ender Dragon, however, he's got the Steve's skin.
Since he is just Steve in a dragon shape, he has the same personality as him.
At the end of the video, when the Villagers were about to eat carrots to turn themselves into Killer Villagers, Steve arrives and kills them all in time. Then, he eats a carrot, turning into the Steve Dragon.
If you couldn't swim in Minecraft
After water becomes toxic, Steve's crops get poisoned. When he tries to eat a bread made of toxic wheat, Failboat tells him not to do, due to the water the wheat grew with being poisonous. However, Steve doesn't listen to Faliboat and eats the bread, turning into the Steve Dragon again.
- He is one of many character alter egos: other ones include Agent Notch, the Killer Villagers, ExplodingLava, Pink Donkey, PinksplodingTNT, TNTSheep, etc...
- He is a retextured Ender Dragon.
- The Steve Dragon's mouth isn't textured, making the face to have a flatter shape, just like Steve's.