The game gifted me with two dragons, so I modded in a [CHILD] token and started a breeding program. With a clutch of young dragons available, I dug out a testing chamber to better understand dragonfire.
Dragonfire is a rather impressive-looking attack with a range of 20+ tiles and a spread of roughly 10 tiles, but no vertical spread. My first goblin volunteer was stunned from the drop onto his pedestal and failed his first (and only) block attempt. The second managed to block, providing me with a test chamber that was regularly engulfed in dragonfire. I started tossing in items; anything organic burst into flames immediately. This included nethercap (logs and an unbuilt floodgate), despite its fixed temperature. Normal stone was also quickly destroyed, with gabbro boulders and unbuilt stone furniture melting and boiling away. Surprisingly, though, metal items appear to be completely unaffected. Even non-fire-safe metals, like tin and lead, have survived countless rounds of dragonfire. I added a couple blocks of special stone (raw admantine and slade), and they too seem unaffected by the flames.
When victim volunteer 3 finally failed a shield roll after months of testing, I modified my testing chamber. I placed the bait pedestal one z-level above the dragon, and added bridges and some built furniture. When I dropped in volunteer 4, the dragon resumed breathing fire, but, since dragonfire cannot traverse z-levels, the goblin appears quite safe, along with several stone bridges on the upper z-level. The stone bridges (gabbro and obsidian block) on the dragon's z-level melted almost immediately. The copper bridge, despite having a lower melting point, is still intact. An obsidian door also survived (presumably because dragonfire cannot enter its tile while it remains closed). A tile containing 1/7 water also appears unaffected.
With this knowledge, plans to construct a dragonfire trap are forming. Placement of the bait and sight-blocking bridges on a different z-level should allow safely harnessing a full blast of dragonfire on command. A staggered column layout at around 10 tiles out should prevent line-of-sight (and, thereby, arrows and bolts) from reaching the dragon while still allowing the flames to flow through and cook enemies. Unfortunately, any creature with a shield normally has a 99+% chance to block dragonfire. Adding additional "fuel" (anything organic--withered crops, corpses, etc.) should provide a source of non-blockable fire to ignite pesky shield-carriers. It may also be possible to use a syndrome-dispersing beast to temporarliy stun enemies as they walk through the dragonfire. Beyond the shear dwarfiness of harnessing a megabeast for fortress defense, one advantage of a dragonfire trap would be that all refuse is incinerated on site, leaving only the fire-safe metal items for manual dwarf processing.
In Summary:
1. Nethercap burns in dragonfire.
2. Metals don't melt in dragonfire.
3. Water doesn't boil in dragonfire, but magma from melted rocks does.
4. Shields almost entirely nullify dragonfire.
5. Dragonfire can't cross z-levels, but dragons still try to burn hostile creatures on other z-levels.