From the Super Mario Wiki
Fire Blocks are a variety of blocks found in Mario vs. Donkey Kong 2: March of the Minis. They are the same as Pink Blocks, but they have another use. If there is wood and the player picks up red blocks, a red glow will be in the background. When the player touches the screen, a fire ball appears instead of the usual Stars. At this time, the player can burn wood once. The player has to keep in mind that if any Mini Marios are touching the wood while it is being burnt, they will also be burned. They are mainly seen in the Lava Dome and can be used in that kit, the Special Kit 2 and the Special Kit 3.