It has two traits:
“New blood” refers to your roster of characters.
In season 2, you want to introduce new characters.
Add some new blood.
Usually, you’ll see these characters acting as agents of the different season 2 themes. Characters are brought into the story to supply a stress test, or a meaningful death, or any other form of contradiction.
Say there’s a death in the family – maybe an authority figure. Say a main character’s father. Upon his death, Uncle So-and-So comes to town and plans on sticking around. Here you have one character satisfying several different needs for season 2.
Or maybe two of your main characters break up at the end of season 1, and in season 2 they both have new love interests. These new love interests, would typically be your “new blood.”
Let’s look at some examples:
In LOST season 2, we finally get that hatch open and find Desmond inside. He’s some definite new blood, that will be sticking around for the rest of the story. We also meet the “Tailies” – specifically Ana Lucia, Libby, Bernard, and Mr. Eko. Not to mention the mysterious “Henry Gale” aka Ben Linus, who’s pretty much the leader of “The Others.” All new blood – some sticking around longer than others.
LOST has a lot of characters already, but in season 2 they add a half dozen new ones. That’s a lot of new blood.
In season 2 of Grey’s Anatomy we see the addition of Addison – Derek’s wife, Derek’s best friend Mark “McSteamy” Sloan – the guy Addison cheated with, and towards the end of season 2, we see the addition of Callie Torres, a love interest for George. All significant characters that remain on the show for many years to come.
New Blood. Add new characters in season 2. You get the idea.
What’s a “dragon?”
Anything that wasn’t resolved in season 1, and specifically wasn’t contradicted in season 2.
It just stayed the same, playing itself out throughout seasons 1 and 2. That’s a dragon. And it should be slayed, and resolved, by the end of season 2.
Why call it a “dragon?” It’s the beast that’s remained. The beast that keeps growing and thriving until your kill it.
What does this look like in practice?
A Bad Guy your main characters have been fighting since season 1. Maybe you didn’t take him out in season 1. He’s still here in season 2. He’s a dragon. And you better slay him by the end of season 2, or you’re dragging it out too long.
“Dramatic pace” is all about the pace of your story. If something has persisted through season 1 and season 2 and hasn’t really changed, then it’s time to finish it.
How about a different example of a dragon:
You could have a couple who’re engaged in season 1. In season 2 you didn’t contradict it, they are still engaged. By the end of season 2, you should hit that wedding. Or the end of the engagement. If you don’t, you’re dragging that piece of story out too long.
How about some real examples:
In Supernatural, your dragon is the all-powerful demon “Yellow-Eyes” aka “Azazel.” He’s been the big Bad-Guy the Winchester’s have been chasing since day one. And in the season 2 finale, Dean puts a magic bullet in his chest, killing him for good.
Not too long, not too short – that’s a solid pace.
In Alias season 2, we see SD-6 finally get raided and shut down by the real CIA. SD-6 was the dragon, and in season 2 we see it slayed.
So whatever dragons you have lingering around in season 2 – slay ’em.