How about a demon-dragon that will take the form of a dragon and chases its victims to death, though may also utilize fire and whatnot to also scare them. I didn't see anything about physical harm, so this power would work more as an illusion/night terror/nightmare type deal, and it can be broken if the unaware victim braves up to the monster or realizes its an illusion, I.E. realizes that being eaten or burned by dragonfire doesn't actually harm him/her. The strategy is to utilize the primal and ancient fear of being hunted by a predator, the dragon will either stalk the victim in a near-similar horror cliche type method, or downright reveal itself with a defeaning roar and massive, predatory power and aggression.