The False Night Fury was a decoy made of dragon hide and ash from a charred Loki Tree mounted on wheels that was used to capture Hiccup and Toothless in "We Are Family, Part 1". It was later seen again in "We Are Family, Part 2".
The False Night Fury was created to act as a decoy for Hiccup and Toothless. Knowing that they would follow the fake notes that Mildew had left in the Bork Papers, the decoy was placed on the Isle of Night so that, when Toothless saw it from far away, he would believe it was another Night Fury. Once he had approached the decoy, the Outcasts could easily capture him and his rider.
Once Hiccup and Toothless arrived at the Isle of Night, the Outcasts rolled the decoy out and used Toothless' own echoes to make him believe it was another Night Fury. When Toothless approached it, Hiccup realized something was off and told Toothless to come back to him. Unfortunately, Toothless was quickly captured by bolas from the Outcasts, who would soon also capture Hiccup. Alvin the Treacherous revealed to Hiccup that the Night Fury was a fake before taking him and Toothless to Outcast Island.
The other Dragon Riders then found the False Night Fury, which was left on the Isle of Night, during their search for the captured Hiccup and Toothless. Ruffnut and Tuffnut, believing it was a real Night Fury, blasted it to smithereens with Barf and Belch's fire. Stoick and Gobber, having heard the explosion, rushed over on Thornado to find out what happened. While they were angry that the twins had destroyed their only evidence, Gobber was able to determine that the decoy was made out of dragon hide covered with ash from a charred Loki Tree. As Loki Trees only grow on Outcast Island, the group figured that the Outcasts must have captured Hiccup and Toothless and set off for Outcast Island to find them.