The idea of having a Dragon as a ruler is so absurd and terrifying as a metaphor for the absolute power of monarchy that all Sam Vimes could do is go Laughing Mad. Even more disturbing is seeing the people of Ankh-Morpork slowly adjust to live under these circumstances, up to accepting the necessity of Human Sacrifice. Vivat Draco!.
The last moments of the Brethren. All of a sudden, Death joins the conversation and nobody notices until it's too late.
“Brothers,” repeated Brother Watchtower, trying to re-assert himself, “we are all here, aren’t we?”
There was a worried chorus of agreement.
“Of course we are.”
“What’s the matter?”
Making the above worse is the build-up, with the rats fleeing and the sound of the Dragon suddenly approaching. The ensuing damage is so bad that when Brother Fingers returns to the headquarters his friends have been melted, and he is so traumatised that merely being asking if he wants a snack toasted makes him freak out and run into the Shades.
The Dragon's first appearance has it briefly appear on the streets of Ankh-Morpork. Its first victim is an unfortunate thief who mistakes the noise for a mugging victim, jumps out behind the wall and is burned to ashes before he can even finish saying "OH SHIT".