Undead Dragon Information
The Valley of Drakes dragon is located near a wooden bridge close to the New Londo Ruins entrances. He's guarding three items. This mini boss is completely optional and will not attack you until you go to pick up one of the items he is guarding. Two of the three items can be acquired safely without aggroing the dragon.
A second Undead Dragon is found blocking the bridge in The Painted World of Ariamis. He's guarding two items. This dragon is also optional, but it provides a shortcut to the boss area and some decent drops, if you for some reason would like to avoid the enemies of the level's underground area.
After this dragon is defeated its hind part will be left behind on the bridge. The dragon's remains are similar to the Bounding Demons of Izalith, but totally harmless. To be able to pass under it you have to do a jumping attack (Forward+R2/RT) to make it stand up.
Drops (Valley of Drakes)
The dragon will breathe a purple haze in an area towards you, if out of melee range. This attack is toxic and can build up quite quickly. Avoid this by running out of the breath range.
Swipes its claw horizontally. This is short-ranged attack and deals high strike damage, but is slow, which gives you enough time to roll away to safety. This attack can track the player but also deals a bit of AoE damage, just like the Toxic Breath.
The dragon slams its claw into the ground, dealing dangerous damage but can easily be rolled away from.
Head lunges forward and takes a bite off of you. This medium-ranged attack is its highest damaging attack, and should be avoided.
Strategy - Ranged
The Dragon can't move from it's spot and has limited range for all of it's attacks, which makes a ranged kill extremely easy, if difficulty is not a matter of patience. Position yourself just outside of his attack range, to be effective with ranged attacks while reducing the dragon's effectiveness to nothing. If you stand out of his breath attack range, you can spam Lightning Spear to get in more damage; you do not need a lock on with the spell if you manually aim your character properly. Aim for its wings as it seemed to hurt it the most. Depending on your level this might take a while, but for the amount of souls, a Dragon Scale, and the items it was guarding, enduring a little tediousness is a small price to pay.
Hyper Mode Strategy
Equip the Red Tearstone Ring, which can be acquired in one of the two locations the Undead Dragon is present- please visit our page 'End of the Valley. Lowering your HP below 20% will significantly increase your damage dealt, while being at no risk of death, if you keep the proper distance. The Symbol of Avarice may do the trick in reaching your optimum HP level. Even with a modest bow, it should take no longer than a minute of two to dispose this Dragon.
Strategy - Melee (Valley of Drakes)
If you have a melee weapon least moderate range (such as a longsword) then you can also engage the dragon, mano-a-talon while not getting hurt too much. Start at the ledge, on the left of the Undead Dragon, then aggravate it any way you like. Wait for it to breath it's poison breath and then for the gas to dissipate before you run up and attack the closest foot (a running stab works well) with a single hit. Once your hit lands then roll back and run out of range of it's next poison breath (back to where you started), then repeat the process until you can remove the 'Un' from 'Undead Dragon'.
Strategy - Melee (Painted World of Ariamis)
Run up to the left, in front of its right foot, by the small column and attack the foot with no lock-on. It will hit you with its poison breath, but if you have decent Vitality you should be able to withstand the blasts without losing too much health. If you stray too close to the foot for too long it will lift it to smash you. Roll backwards to avoid this and then get back into position. If you want to avoid the poison as much as possible, you can bait the first breath attack by standing next to one of his feet, then running to the other. Attack this foot a few times, then run back to the other one and his breath attack should be targeted at the foot you just left. Keep switching like this and watch out for the foot smash and he'll be down in no time.