If you said no to the blacksmith to create the weapon, then the dragon quest is over and you won't slay the dragon, nor will the dragon ever come back. The dragon only comes once, and you rather accept the blacksmith's offer to create a high powered weapon or you say no and the quest is forgotten. (Hint: Don't let the thief girl wield the dragon blade to slay the dragon, or you won't get as much as was stolen from you. Let the knight do it instead. Never throw the knight into the dungeon, either)