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out·fox verb (used with object) to outwit; outsmart; outmaneuver: Politics is often the art of knowing how to outfox the opposition.
Out-dragon is not a word one would likely find in a dictionary. It is the sort of usage that patterns itself after "outfox". Just like "fox", "dragon" in this instance becomes a transitive verb. Out-dragon basically means to take on the characteristics of the dragon, and in addition to surpass someone or something in those characteristics.
[Edited at 2011-08-23 12:09 GMT]
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