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he will take away all of your experience and gold and you have to start the game all over again! not really. the game freezes at that point so you can hit reset and the next time you get to him, SAY NO! (FYI: to beat the dragonlord you need to be at least at level 20 and have 100 magic points cause you need to use the spell healmore 10 times. don't worry though. as a human he is weak and you can kill him in 3 hits! but then you fight him as a dragon....) Good Luck!

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Q: What happens if you say yes to the dragonlord in dragon warrior 1 for nes?
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