1. the title song of a children's movie. A child with no friends meets the dragon and gets a new friend. This all takes place in a magical town... which the dragon can't leave because if adults see him ... he will be forced to go away. The child is passed over as having an imaginary friend.
2.A reference to smoking pot. as seen in the movie "meet the parents".
Tommy:hay billy guess what I got for my bitrhday?
Billy: I dunna what?
Tommy: A dvd ..."puff the magic dragon".
Billy: cool ... lets go watch it now!
Sue:hay tom did u see meet the parents yet... what's this about puffing the magic dragon?
Tom:I'm not sure ... but it sure made me laugh!