Should I continue to use my electric heater?

OK, you have a problem, a worn outlet socket. The heater is likely undamaged. The metal fingers that squeeze the spade pin of the plug are no longer making firm contact when you put the plug into the socket. Corrosion on the metal meant there was a resistance between the socket and the plug. The resistance did what resistances DO, generated HEAT. Lucky for you that the arc simply burned the metal and it lost electrical contact! You could easily have had a fire start in the wall if the arc which happened hadn't blown the circuit like a fuse. Do NOT use this socket for anything and replace the socket as soon as you can. It happened once, which means it WILL happen again and now the only uncertainty is WHEN. Do you want to risk a fire starting in the wall? As for the heater, shine the metal spade pins of the plug with sandpaper to remove any corrosion which could have been the cause or contributed to the cause of the arcing. Heaters are simple devices and in your case, it appears to have lost electrical contact when the arc happened. I have a small space heater with an electronic control which I have to turn on with a reset button. Once set, it controls the heat based on temperature with an electronic thermostat circuit. If it loses power, it does NOT turn itself back on when the power returns. It fails in a safe mode, off. I have surge protectors which work in this same manner for all my electronics, computers, TV, VCR, the works. When power is lost, there is usually a large surge, a voltage spike easily as high as 150% of normal when it comes back. By the surge protector not resetting itself, that surge is avoided completely. Power is restored when I push the reset button on the surge protector long after the initial surge has passed and voltage is back to normal levels. This type of protection is called a drop-out relay. Replace the socket and shine the metal contacts of the plug and you should be back in business and SAFE.

I agree with Just guessing. The outlet is probably worn and the plug is loose and causing a short. (Heaters are high-energy draws.)

Replace the outlet before something worse happens than a scorched prong.

i would replace the plug myself.they sell them at hardware stores.you cut the wire at the plug and clamp down the new plug and screw it tight.i have used them for a fan.they also sell a heavy duty type of plug you probably need for that.used one for dryer along time ago.

Sounds like a worn receptacle. Install a new one.