Dragon's Daughter III was a ship that belonged to Sea Hawk.
Sea Hawk presumably bought the boat after purposely setting the previous Dragon's Daughter (The Dragon's Daughter II) on fire.
The Best Friends Squad sailed with Captain Sea Hawk from Seaworthy to Salineas aboard the ship. The ship was set aflame by Sea Hawk whilst fighting back the Horde's heavy ship, with him and Glimmer and at the helm. The blazing ship collided with the Horde's, destroying both in the process.
It was soon replaced by the Dragon's Daughter IV.