In case of short circuit,fuse helps to stop fire by breaking the circuit.
A short circuit is simply a low resistance connection between the two conductors supplying electrical power to any circuit. This results in excessive current flow in the power source through the 'short,' and may even cause the power source to be destroyed. If a fuse is in the supply circuit, it will do its job and blow out, opening the circuit and stopping the current flow.
A short circuit may be in a direct- or alternating-current (DC or AC) circuit. If it is a battery that is shorted, the battery will be discharged very quickly and will heat up due to the high current flow.
Short circuits can produce very high temperatures due to the high power dissipation in the circuit. If a charged, high-voltage capacitor is short circuited by a thin wire, the resulting huge current and power dissipation will cause the wire to actually explode.
Arc welding is a common example of the practical application of the heating due to a short circuit. The power supply for an arc welder can supply very high currents that flow through the welding rod and the metal pieces being welded. The point of contact between the rod and the metal surfaces gets heated to the melting point, fusing a part of the rod and both surfaces into a single piece.
Answered by: Scott Wilber, President, ComScire - Quantum World Corporation