I think the biggest plot hole this season is that they haven’t yet shown us what DQ has over Rumple. He already had the box when he realized she was up to stuff, so it wasn’t that. She didn’t have anything to blackmail him with until he started making deals with her. He had ribbons that he knew she’d be willing to trade for…and that’s ALL we’ve seen. It even looks like he has no clue what she has worth offering back (though the knowledge she gives him IS desirable for him).
Why she wasn’t a snail the instant Belle started crying after the mirror is a mystery that I hope they explain. (A snail in a hat, no less.)
As for how he plans to deal with Henry & Belle, I’m suspecting that he intends to take their memories. Which would be an interesting twist when combined with the scene they cut (they really, really shouldn’t have cut the Henry scene if that’s where they’re going). I think he believes with the hat, he’ll have enough power to use his magic anywhere.
We did see that the Dragon had magic abilities even in the LWM, and I’m almost expecting that we’ll see DQ using magic outside of Storybrooke in the coming episode. Also, lights flickered when Henry was born–either Henry, Emma, or both affected that without knowing, in a way that appears to represent magic gone a little haywire. He was born in Phoenix.
So…it may be that with enough or the right kind of powers, magic can be used in the Land Without. In S1, we saw limited magic (mostly connected to magic objects) in use even in Storybrooke. So some magic can survive even without external magic being present.
Keeper of Belle's Gold magic, sand dollar, cloaks, purple FTL outfit, spell scroll, library key, copy of Romeo and Juliet, and cry-muffling pillow, Rumple's doll, overcoat, and strength, and The Timeline. My spreadsheet: https://drive.google.com/file/d/0B6r8CySCCWd9R0RUNm4xR3RhMEU/view?usp=sharing