Krayt Dragon Tissues are special items dropped by Krayt Dragon variations that can be used to increase the power of crafted ranged weapons. During the crafting process, a Weaponsmith can insert a tissue into a blaster power-handler, increasing the maximum damage and lowering the speed of the handler. This change is reflected in the final weapon as well. Each weapon requires a different number of identical tissues to power up the weapon, depending on the number of power-handlers the schematic for that weapon calls for. A weapon with a single handler only requires a single tissue; weapons with two or more handlers, however, require one tissue plus an additional tissue for each handler required. The first tissue is used when creating a factory schematic for the handler, with the additional tissues supplied as ingredients to the factory.
"Standard" tissues add 30 maximum damage and lower weapon speed by 0.3. This represents the low-end of tissue modifiers. Tissues commonly reach stats of +100 damage/-0.6 speed and higher, with "exceptional" tissues going far beyond that.
Note: As of the NGE, this loot is useless, because it cannot be added to the weapons. Also not sure if they still drop.