From LQWiki

DragonLinux was a Slackware-based distribution that installed to a file on a FAT partition. Using a loopback filesystem, DragonLinux enabled the installation of Linux without a separate partition, while allowing Linux to run on an ext2 filesystem. DragonLinux could be installed from a MS-DOS executable. The installation could be run from a DOS bootdisk or Real DOS mode under Windows 9x. Earlier versions of DragonLinux used the UMSDOS filesystem. The loopback filesystem shows up as a single file under DOS/Windows, and avoids the messy permissions issues of UMSDOS.

DragonLinux is currently dead, with the latest version having been released June 11, 2001. The author of the DragonLinux's webpage suggest users use Knoppix instead. They may also want to take a look at SLAX or ZipSlack. SLAX is a live CD based on Slackware (in much the same fashion as Knoppix is based on Debian), while ZipSlack is provided by the Slackware distribution, itself, and can be unzipped on and run from a FAT or VFAT filesystem via UMSDOS.