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I've seen a few posts on here that run (at around 2250 pts):

Tooled up Lord on a Star Dragon
Fire Mage on a Sun Dragon with 2x dispel scrolls

Now obviously you lose out on a BSB, a second Mage, power and dd, and who can forget the always strike first with great weapons say in like 4 squads of white lions, etc...

Also, T3 elves... Eh survivability is questionable, so that tooled up lord seems very killable...

Am I missing something?? Can someone explain to me if it works?

Don't get me wrong, I'd love to run a list like (No point values here as I'm at work and don't have my book):

Lord Tooled up on the Star Dragon
Mage x2 Disp Scroll on a Sun Dragon

(Sorry Moon Dragon, you get no love today)

2 x10 Archer squads (Long Bows are good, plus I need core)

Couple of Lion Charriots

and as many Repeaters as my opponent would hate me for having

The only thing in the armythat would worry me is the Lord on the star dragon, but like a blood thirster or black ork warboss on wyvern they are the super big hitty models that will frighten enyone.

You lack any sort of staying power for the rest of the army.

I'm sure you'd win alot of games but it will be because of the lord on dragon.

Take Tiranocs instead of Lion chariots. Cheap cruise missiles. DPs with banner of mover through forest is also good.

1. Don't take Star Dragon. Save a bucket of points and take a second sun dragon.

Double dragon works best when the two dragons work together. If two dragons charge a unit, you dont need to upgrade them.

This save 140 much needed points.

2. High Elf Lords can have just about the nastiest combination of sdaves going, alongside an optimised Dreadlord. T3 is not a problem, a cascade of 4+ and 5+ saves is their problem. Use combinations of Vambrace of Defence, Armour of Protection, Dragon Armour, Helm of Fortune, Temakadors Gauntlets and Guardian Phoenix to the budget you want to spend, and dont forget the shield.

3. Forget mounted great weapons, take a lance. While you are at it take Amulet of Light so the dragon and rider can waste daemons, forest spirits and ethereal creatures.

4. Now on to the Dragon Mage. Give him level 2, Silver Wand and two dispel scrolls.

5. For your mandatory core take Spearelves, dont try to cut down to token units take units of 21, even here. You wont regret the investment, besides it will jack up yuour model count.

6. Then cut striaght to Rare choices and buy up as many Great eagles as you can afford. This arm,y needs to augment its strength: air force. You also need the cannon hunting ability.

7. Spend the rest of the ponts on cavalry and chariots. Tag team chariots with your advancing infantry wall, the combination charge will be brutal indeed.

The lists I have been seeing is the Calandor Army list.

Lord on Star dragon- starlance, 1+dragon armor, reroll trinket
Dragon Mage- Lvl2, silver wand, ring of fury
(seriously 1 mage with 2 scrolls is not defense. he has 4 power dice all to himself and gains an additional die on each cast, go offensive with him)

2 units of 10 archers
4 units of 5 dragon princes w/ champions
2 lion chariots (saw a cool conversion with a single small dragon pulling the chariot)

Thats the army. Knights, Chariots, couple Archers. Basically play with the dragons.

Star dragon and star lance is a powerful combo that lets you charge ranked up units from the front alone and win.

It is one of the few reliable ways for a single character model to do so. Even a Bloodthirster has problems pulling that off, the only other one I know is a Chaos lord on chaos dragon.

however the default benefits of a dragon, flying, terror and flank smasher can be got for 174pts less with a Sun Dragon and a sharp stick.
If youn want to frontal charge you use both dragons and cut out the overkill. Aftrer all with two dragons you need to start saving points.

Star dragons are very good but for one dragon lists.

As far as I can tell, this army works if there's enough terrain. If you can hide the dragons while your support messes up cannons and the like, your opponent is toast. The problem with these list is that it tends to revolve around the star dragon, and that you whole list is geared towards supporting one model. Talking about all your eggs in one basket syndrome. If you like very agressive lists, it's the way to go. If you're a cautious player, you'll wet your pants trying to play this list.