With Unreal Engine only, or do I have to some post-effecting in other programs?
I don’t see why not, but you need to create realistic fire/smoke textures in other software
Im aiming at effects like this: http://www.cgmeetup.net/home/making-of-the-hobbit-the-battle-of-the-five-armies/, fire starts on 0:27.
Would Blender be nice for post-prosessing? I see it can do something like this 
Blender 2.71 Feature Preview: Smoke and Fire in Cycles - YouTube
You’ll struggle to get truly volumetric lit smoke like that, fluid simulations are extremely expensive and can’t run in realtime, which is which it looks awful in Blender until you render it.
Follow the Cascade tutorials to get started with Particle systems in UE4. Fluid Dynamics-based stuff is very advanced, and you usually fake it somehow in Unreal using some pre-baked textures. I use Maya for my fluid sims personally.
I cant use Maya, since it crashes every 20 minutes or so. Im working in MODO. Maybe I can do some post-prosessing there.
You wouldn’t be able to get all that far, something like the Nvidia Gameworks stuff could get close, but you would probably be limited on the size of the simulation. Otherwise, you would have to do it with regular particles which don’t really do that type of simulation.
I know Weta use Maya, but I think they use in-house technology for this stuff. I will try to see what I can do in MODO Indie Yeah FlameWorks would be fun, when UE4 gets GameWorks.
Modo isn’t going to help you much in doing simulations for game engines, typically you can’t export particle stuff
So what would be my best go for fluid-simulations like this? Particle-data export would be awesome 
Just to clear something up: Do you want to use this in a real-time application or do you want to create a movie?
I’m asking this because you mention doing post-processing in other tools, which is not really possible for real-time applications. If you just want to create a movie you should not try to do this in Unreal at all, compositing it in afterwards would be way easier.
I want to try to create a firebreathing dragon scene in Unreal Engine. I thought it may be possible with the particles in Unreal Engine. Not a whole or short-movie.
Your best bet then would be to dive into cascade and learn how to work with particles in Unreal. Fluid grid simulations like that blender example are cool when you can do them offline, but are not really an option in realtime. Something like Flameworks might become viable at some point in the future, but at this point these kind of solutions tend to cost way to much and have to be done so low res that a classic particle based approach will probably look better in most situations.
If you need something that’s from only one camera view, like not during gameplay, then you could do something like what they did for the Infiltrator demo, they did a FumeFX simulation in 3ds Max and then rendered it to slices and did some weird stuff with particles, I think Epic has a Youtube video about it.
If something like this is enough for you: https://m.youtube.com/watch?feature=youtu.be&v=L1577QeCdwk
Then you could wait for flameworks (but you risk that it will run only on Nvidia cards, however, it runs well on a 680 according to this video.
Im on a GeForce 850, so running GameWorks wouldnt be a problem. Would FlameWorks or any “Works” tools come to Unreal Engine when it gets GameWorks?
Yes, the entire GameWorks package is being implemented at the moment. Though it will take a couple of months, they are rolling out the features one by one. Enough time to work on other aspects of the sequence, the dragon etc. Once FlameWorks get’s integrated you can add that last piece of awesomeness 
Thats amazing! Maybe Ill should go an model the dragon, meanwhile.
Here’s the forum thread: NVIDIA GameWorks Integration - General Discussion - Unreal Engine Forums
And here’s the github site: https://github.com/NvPhysX/UnrealEngine ( remember to choose the right branch)
Will I need to do coding to intregate the branch or is it a tutorial some place?
No, you don’t need coding, there are example projects for each branch and documentation included. To build it just use the standard build guidelines. You will need visual studio.