The Albino Dragon species went extinct with the rest of the dragons at the end of the Dragon Age, right before the Golden Age began. When Alex, Conner and Lester are seriously injured during the French Army's attack on the Elf Empire in A Grimm Warning, they are found by the healer witch Hagetta. She applies albino dragon flames on them to heal their wounds. In Worlds Collide, said flames are used to rebuild New York City after Alex destroys the city under the curse put on her by the witches of the fairy-tale world.
The flames come from the breath of an albino dragon. They are peach-colored and painless. This type of flame has the exact opposite traits of normal fire, as it regenerates all that it touches rather than burning and disinigrating what it touches.
As the dragon species that produces these flames became extinct a very long time before the Land of Stories books take place, it can be expected that the species' flames should not be existent. However, Hagetta's ancestors managed to acquire and keep some in existence, and they have been passed down from generation to generation.
"The albino dragons were very rare and just as awful as regular dragons, but their flames had unique healing qualities. My [Hagetta's] great-great-great-great-grandmother acquired some of those flames during the Dragon Age and my family has kept them burning from generation to generation."
- ↑ TLOS III, ch 25 p. 377