Well, I'd assume they do, otherwise it would go against the law of conservation of energy, but so does magic, so meh.
As to killing Dracoins, theres a myriad of strategies out there, ranging from insane cheese to crafty and honourable. Dispel magic should work to see him (I think) and Death Fog will kill the Stalkers, it will hurt your party a bit, but not much. Just stock up on scrolls of acid resistance for your tanks.
Hope that helps
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The waves came crashing in like blindness.
So I just stood and listened.
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