The Dragon Jewel is one of the King's Lost Things, a jewel that has the power to destroy all the dragons forever. The Jewel is made of amber with two or more dragons intertwining with each other. One of them is suffering from a deadly disease that could cause the extinction of dragons.
During the First Dragon War, the Wodensfang befriended Hiccup Horrendous Haddock I and stole the Dragonsword from the firepit that was located underneath the mountain that would eventually have Flashburn's School of Swordfighting built on top of it. The Wodensfang then gave the sword and the jewel (which was hidden in the hilt of the sword) to Hiccup the First and told him the Dragon Jewel's secret so he could end the war. After the war ended, in return for the secret, Hiccup the First put a mark upon his forehead to promise he would never use the jewel's power for evil. Hiccup then used the Dragon Jewel to train dragons for the first time in the history of the Barbaric Archipelago. 
The Dragon Jewel was first mentioned here. At the beginning of the story, Hiccup and all the other young Vikings and their parents of the Barbaric Archipelago venture to Flashburn's School of Swordfighting to learn sworfighting under the tutelage of Flashburn. When they got there they were suprised to find out that Flashburn was missing and that Alvin the Treacherous and Excellinor the Witch were there instead. The witch explianed the Prophecy of the Wilderwest to the tribes of the Archipelago, and the Dragon Jewel's role as both one of the King's Lost Things and an object that has the power to cause all the dragons to become extinct.
When Hiccup descends into the fire pit inside the cavern located underneath Flashburn's School of Swordfighting, he is told the story of Hiccup Horrendous Haddock I (only part of it) by the Wodensfang.
At the end of the book, Hiccup, Toothless, Windwalker, the Wodensfang retreated from the siege of the castle and the boy hunt. Hiccup, who's hands were covered with Venomous Vorpent venom, read the Last Will and Testament of Grimbeard the Ghastly. Unknowingly, the venom revealed that the map to the Dragon Jewel was on the will.
Eventually, Hiccup was crowned the true King of the Wilderwest and was given the King's Things, including the Jewel. However, Wodensfang, who had recently woken up from Sandsharks' venom, revealed the jewel they found was actually a fake since there were no dragons in the amber. This forced Hiccup to face the dragon Furious without any protection.
During the battle, Hiccup figured out the the Dragon Jewel was hidden in the lobster claw necklace Fishlegs gave him. Instead of using the Jewel, Hiccup threw it into the ocean so now one could use it to destroy the dragons. Furious was able to pick it up, but began to believe Hiccup's word.
Alvin soon swooped in and snatched the Jewel away. Before he could smash it, Toothless managed retrieved it. In his old age, Hiccup decided to place the Dragon Jewel among his belongings on his funeral pyre, so no one could use it.
The Dragon Jewel's main purpose is to send all the dragons into extinction. It can do this because inside of the jewel, two tiny dragons are incased within the amber. One of the dragons is suffereing from a disease incredibly dangerous to dragons, so much so that it can cause them all to become extinct.
Notes and References
- ↑ How to Steal a Dragon's Sword. Book 9. Cressida Cowell. 2011.
- ↑ How to Betray a Dragon's Hero. Book 11. Cressida Cowell. 2013.