In Lapland, the workers are a copper mine drill into something that is bleeding. They look at the sample and see it's a hunk of flesh that seems to be preserved. They stop the drilling to investigate and find what appears to be the tail of some giant, dinosaur-sized creature. It's taken to the lab of a doctor, who discovers it's alive. The tail quickly regenerates into the full-sized creature, which resembles the Aztec God Quetzalcoatl. It has a dragon head, a snake-like body, small limbs and flying wings. They also learn it's a different sort of creature, halfway between reptile and mammal, as it also has some fur in addition to its indestructible scales. The creature at first rampages in the countryside, where it begins to emit an acid-like substance from its mouth. Lots of soldiers are dissolved. Then, it makes way to the city where the army has to try to destroy it. They think they do but one of its taloned claws falls to the bottom of the ocean, where it will presumably regenerate into a new creature.
I've always like this movie, because it treats the events so seriously. Story-wise, this is a great idea for a giant monster movie. However, it has some of the worst special effects of the creature, which basically looks like a puppet. If only someone would go back and re-do all of the effects shots for a special edition. The movie also heavily influenced Larry Cohen's Q (1982).