Baptism by fire is the baptism of the Spirit- the reception of the Holy Ghost that cleanses one from sin and makes one a “new creature.” Elder Bruce R. McConkie taught:
“The Holy Ghost is a sanctifier whose divine commission is to burn dross and evil out of a human soul as though by fire, thus giving rise to the expression baptism of fire, which is the baptism of the Spirit.
Forgiveness is assured when the contrite soul receives the Holy Spirit, because the Spirit will not dwell in an unclean tabernacle . . . . It is the Holy Spirit of God that erases carnality and brings us to a state of righteousness. We become clean when we actually receive the fellowship and companionship of the Holy Ghost. It is then that sin and dross and evil are burned out of our souls as though by fire.
The baptism of the Holy Ghost is the baptism of fire. There have been miraculous occasions when visible flames enveloped penitent persons, but ordinarily the cleansing power of the Spirit simply dwells, unseen and unheralded, in the hearts of those who have made the Lord their friend.”
(New Witness, pp. 239, 290.)