First let me make it clear that there is no intention here to discriminate between the human sexes. The advice applies equally to the devouring of women, though the method of preparation and the cooking time may vary. Men, for example, frequently wear armor, which requires delicate skill in removing; if any fragments remain, they will melt and spoil the flavor.
When a man comes into the presence of a dragon, it sometimes happens that he becomes ready, for the first time in his life, to tell his story. Not the story he has been telling to his friends or to himself, but his real story: without effort, without holding back or holding up or holding in. If he only thinks he is ready, or pretends to be ready, you will know it at once and may dine at your leisure. You need not withhold the flame from one who cannot even tell his own story. But if he is truly ready then then fire will not harm him, but will burn away what is no longer needed. This man is to be greeted with a low bow and rewarded with abundant treasure, and he will cease to long for the death of dragons.
That is the deep meaning of the proverb. There is also a superficial meaning, which you may find of more practical value. A man who is not ready to tell you his story may attempt to bribe his way out of the situation by telling you a story about where treasure is hidden. It is pleasant to pass the mealtime in speculating on whether or not he lied; if he did, your revenge is already taken.