I remember the book (series) starting off with the slaying of an ice dragon, which is the second to last dragon left. The actual last dragon is friends with a wizard, who turns the dragon into a scrawny teenage boy to protect him since he was going to recklessly attack the dragon slayer squad.
They come across a massacre of some sort in the forest, meet a female elf. The dragon eventually falls in love with the elf.
The dragon and wizard travel to a village. There, the dragon works as a blacksmith I think. I believe the slayer squad come into the village and a fight goes on, but the village is saved due to the efforts of the dragon, wizard, and elf.