The Dragon's Lair is home to a large sleeping Dragon, who guards the Magic Mirror. As one might guess, the Dragon doesn't really want to give up his mirror, so you will have to get it from him.

The first method is likely the best and scores the highest. For this method you will need the well bucket filled with water. When you enter the Dragon's Lair, use the bucket on him. He will awake as you approach, but you will throw the water right in his face. The Dragon will end up coughing up a several clouds of smoke, get mad and leave. When he does, he leaves the mirror behind and also opens the outside door.

The second method for getting the Magic Mirror from the Dragon involves having the Magic Ring. If you are wearing it, the Dragon will not wake and you can simply take the mirror.

The last method, you can use the dagger to slay the Dragon using the weak spot under his neck (as in The Hobbit).