What's that smell?

So today I learned the difference between the different settings on my voltage converter thingy, when I was using my hairdryer and noticed a slight crackling sound from the direction of the outlet, followed by a little smoke.

Lesson learned! But don't worry, I react fast - no damage done, just a lingering smell in the general area of the bathroom/bedroom. No fires. And once I switched over the converter settings, I was even able to resume drying my hair!