1. "The Paperbag Princess" by Robert Munsch (Author) and Michael Martchenko (Illustrator)
In this hilarious tale, a dragon destroys Princess Elizabeth's castle, burns her clothes and snatches her fiancée, Prince Ronald. Wearing only a paper bag, the resourceful princess sets off to find her prince. She outwits the dragon and rescues the prince, who turns out to be no Prince Charming.
I have fond memories of this book which I owned as a child, along with a copy of Robert Munsch's "Mud Puddle" (both in miniature format, perfect for little hands). My favourite part was, and still is, when Princess Elizabeth calls the spoiled Prince Ronald "a bum" (and rightfully so).
2. "Merlin and the Dragons" by Jane Yolen (Author) and Li Ming (Illustrator)
Jane Yolen draws upon Arthurian legends in this book, which features Merlin telling a young King Arthur a story about another boy who had a prophetic dream about battling dragons.