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As a quest objectiveEdit
The item can actually be found just outside of the Ruby Dragonshrine, where Alliance or Horde NPCs are defending against the Undead which rush at them from the Dragonshrine area. One has been found at [43.8, 51.5].
The Dahlia's Tears is a flower that grows up, instantly, when the ground is cleanesed by Ruby Drake's flames. It's confirmed in the Battle of Angrathar the Wrathgate cutscene.