[COLOR="Blue"]Could it actually be the power cord itself?[/COLOR]
Yes it could be the power cord. You will have to disconnect it from the dryer and check that none of the wires are shorted to each other. Also carefully check the unit's terminal strip.

[COLOR="Blue"] My daughter said dryer was up against the plug when it popped the first time.
I checked for lose wires everywhere in dryer and found nothing unusual.[/COLOR]
Strange that you did not find and evidence of the arc&spark. Usually you will see either carbon or a weld mark. Could be that the heating element has broken and is touching the case, this would be at the top of my list.

Do not know if it touching the plug has anything to do with it. Only thing I can think of is that the unit was factory wired for a 4 wire hook up and a 3 wire power cord was used and the ground strap at the terminal strip was not installed.
Note: That there would still have to be another problem in the unit to cause sparks.