The nature of Dragon Town is quite the engima. In "Dragon Quest", Twilight Sparkle claimed that ponies and dragons almost never had contact with each other, implying dragonkind and ponykind have been separate for generations, yet Dragon Town is situated in Fillydephia. It's possible that Dragon Town was founded after this revelation however. Spike visited Dragon Town when he and Princess Luna investigated mysterious fires that were popping up throughout Fillydephia. What he saw initially was a peaceful and generally happy village, but he was treated rudely by most of its citizens. He found himself in a comic shop called Dragon Comics, where he would befriend a kind dragon named Mina. After Spike proved unsuccessful in finding out who or what was causing the fires, the Fillydephia Police Department had decided to enact a strict curfew law in Dragon Town. Spike eventually fond the true cause of the fires, a kind and gentle Fire Snail. After another fire broke out, the dragons of Dragon Town helped save ponies in danger. After realizing their mistakes, and seeing the selflessness of the dragons, the police lifted the curfew.