The fire is a disator that destoryed the stitchpunks' cathedral. It was caused by the winged beast flying it and knocking over the fire pot in 1's room
How the fire spreadEdit
As soon as the winged beast flew in, it knocked over the fire pot which lit the curtains on fire, soon the whole clockroom (1's room) was engulfed in flames. The stitchpunks escaped, but smoke can be seen during the winged beast attack erupting from the smashed windows, presumbly destroying 6's paintings, the chess set and the clock hands.
The fire did not harm the dolls during the attack, although the fire went up the clocktower spire and to the watchtower. After the winged beast attack in the deleted scene "throw me the end of your rope" 1 looks up at the clockhouse with fire and smoke coming up and says "my santucry.." The watchtower toppled off and it the aftermath the entire cathedral was destroyed by the fire. The clock tower would soon topple and land in the cathedral. The dolls move onto the libary.