From Wikipedia:
Dragonslayer is a 1981 fantasy movie set in a fictional medieval kingdom, following a young wizard (played by Peter MacNicol) who experiences danger and opposition as he attempts to defeat a dragon.
A co-production between Walt Disney Productions and Paramount Pictures, Dragonslayer was more mature and realistic than other Disney films of the period. Because of audience expectations for a more family-friendly film from Disney, the movie's violence, adult themes, and brief nudity (the first Walt Disney production to do so), was somewhat controversial at the time - even though Disney did not hold US distribution rights, which were held by Paramount (it was rated PG in the U.S.; TV showings after 1997 have carried a TV-14 rating). Disney later created Touchstone Pictures to produce more mature fare.
The film was directed by Matthew Robbins (who later directed *batteries not included), from a screenplay he co-wrote with Hal Barwood. It starred Peter MacNicol, Ralph Richardson, John Hallam, and Caitlin Clarke.
Dragonslayer also featured then-unknown actor Ian McDiarmid as the minor character Brother Jacopus. McDiarmid's next film role after Dragonslayer would be that of the villain Palpatine in Star Wars Episode VI: Return of the Jedi, a role which he would reprise in the subsequent Star Wars films.
The special effects were created at Industrial Light and Magic, where Phil Tippett had co-developed an animation technique called go motion for Star Wars Episode V: The Empire Strikes Back (1980). Go motion is a variation on stop motion animation, and its use in Dragonslayer led to the film's nomination for the Academy Award for Visual Effects; it lost to Raiders of the Lost Ark, the only other Visual Effects nominee that year, which special effects were also provided by ILM. The film was also nominated for the Academy Award for Original Music Score; Chariots of Fire took the award. Including the hydraulic 40-foot (12 m) model, 16 dragon puppets were used for the role of Vermithrax, each one made for different movements; flying, crawling, fire breathing etc.[1]
The film was also nominated for a Hugo Award for Best Dramatic Presentation. Once again, it lost to Raiders of the Lost Ark.
Dragonslayer also marks the first time ILM's services were used for a film other than a Lucasfilm Ltd. production.
In October 2003, Dragonslayer was released on DVD in the U.S. by Paramount Home Video.