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The wolf is still sporting the grandmother's clothes once we see him once more at Shrek and Fiona's wedding ceremony at the tip of the film. The wolf from "Little Red Riding Hood" not only seems on this scene, but also he's actually laying in a mattress dressed as a grandmother — in reference to his storybook tale. "Shrek" makes lots of references to classic fairy-tales, different movies, and, seemingly, Disney.
Once inside, Shrek puts on armor found on the bones of unsuccessful knights and orders Donkey to find stairs while Shrek himself searches for the Dragon. Having read a storybook earlier, Shrek guesses that the princess is prone to be "up the steps within the highest room within the tallest tower". Donkey inadvertently awakens the dragon and Shrek is pressured to fight it, only to be flung by its tail right via the roof of the tallest tower. While Donkey retains the dragon occupied, Shrek meets Princess Fiona for the primary time.