As Zuko suspected, this boy is one of the new arrivals there had been rumours of. "It's good to meet you, Henry, though I'm afraid I've never heard of your home before." He pauses thoughtfully. If there's no real dragons where Henry's from, how did his mother fight one? And the dragon that attacked the kingdom he mentioned...?

Puzzling, but that can wait. Henry asked him a question, so he answers: "The Fire Nation is a large group of islands southwest of here. Most firebenders reside there." He's assuming, at least, that he'll know what a firebender is. Why wouldn't he? "If you're new to this world, I can try to explain everything as best I can."