"Didn't they say they found a dragon at Dauna Mine a few years back? I thought dragons were extinct, anyway."
— Wyndia villager
The Dauna Mine is a location in the Dauna Hills region of Breath of Fire III. It serves as the player's starting point in both the child and adolescent segments of the game. It also appears to serve as the world's foremost source of Chrysm ore, which is excavated from the site and shipped via rail.
Sometime during the winter, two miners known as Gary and Mogu blow up a particularly large Chrysm crystal, unknowingly causing the whelp within to awaken. The dragon quickly kills both men and begins to wreak havoc in the mines until it's incapacitated and captured. In order to study the beast further, it is imprisoned in a cage and put on a transport train. This backfires, however, as the dragon manages to rock its cage off the cart and down the mountain slope into the Cedar Woods.
After Ryu's disappearance at Angel Tower, Garr is hired to get rid of another dragon seen in the mines. This turns out to be Ryu, and he and Garr exit the mines together, only to be attacked by the Dragon Zombie on their way out. The duo dispatches the wicked entity and flees after witnessing a meeting between Ryu and a member of the Brood.
After revisiting Wyndia, Bais can be found playing hide-and-seek here on B3F, behind a pillar near the giant dragon skull.