Dragon Helmet is the highest tier of helmets. Out of all the helmets, dragon helmet provides the most protection to players from mobs, attacks by other players, spikes and fires. This item was added in the Chrono Quest update. To obtain this item, players must complete the Gather 1 Amethyst in 4 Days Quest, receive the blue cube, and gather enough resources to make this.
Teammates can come to use if you ask them to protect you, but this can backfire as they know you're crafting, and they might betray and kill you. You can't equip gear or weapon, and you can't place fires while crafting, so if that happens, you're pretty much dead. It's a good idea to craft this inside your or your friend's base. Also, use the IKEA Manual to speed up the crafting process. That way, hostile players and aggressive mobs are not a issue.
Dragon helmet is the upgrade of the amethyst helmet. It cannot be upgraded into any further type of helmet.