Well looks like I'm picking a weapon to start specializing against dragons with

Hmmmm

Maybe I'll use my axe

You're probably not going to get any decent answers here. The game is fairly unknown or hasn't been played by most here, and it's been almost 10 years since release. Your best bet is to go to gamefaqs.com and ask on the dedicated board for the game or look at an FAQ for it on there. I'm sure you'll find your answer.

LOL don't hold your breath. The only dragons I remember are the boss dragons, so you're not going to find them roaming about. You're most likely going to have to build a good sword that is effective against dragons. Again, I forget how that goes.

that was one of my all time favorite games.

I actually still have it.
I remember playing it to some point as a kid, and then couldn't won some boss fight.Actually its great game,
Then when FF XII came I felt like this battlesystem is copied from somewhere and boom.

Sorry I compeletly missed your question (I'm at work)

Train yourself on chains. The longer the chain, the harder your hits will get. 

Get familliar and avoid the dragon's attacks as to give you enough time for your MP gauge to fill up.

I don't know if you have the heal spell so early in the game but you're constantly going to have to use it (Avoid the damn dragon when near death dammit :P)

Get ready for a dragged out battle. I doubt I'll have the patience to go through this game again. Good luck!

It's too early to consider strengthening certain weapon as you haven't encountered most types of enemies. Worry about that when you get to town and can finally create your own weapons.

You owuld be surprised, Onyxmeth.

Thanks, hat.

I just killed the Dragon by using my Spear. I gained four ranks in Dragon killing from that fight alone, which makes the weapon much more valuable. Lizard Men also count as dragons, and there are quite a few of those, so I will continue to sharpen it on their faces.

I've started renaming weapons according to their intended uses

"Dragon Stabber"
"Human Smasher"
"Undead Deader"

You get the idea

I wouldn't say copied. More like inspired. Just like how Vagrant Story kinda takes the battle system from Parasite Eve.

I've been meaning to try it but never got to it.

I played it, and beat it, but damn! Dude you are in the midst of one of the toughest games EVER. The risk/reward system that they have in place (it's been over a decade, so I blocked out most of the details in my memory) will kick your ass. One hit kills abound!

*EDIT* I just read everyone else's post, and we're all saying the same thing!!  LOL!

Vagrant Story is truely a brilliant game.