UPDATE: In Shrek 3, when Shrek frets about being a father, Donkey asks "How did IT happen" implying that he didn't actually. .... I have an idea! What if when the babies were born, they looked more... normal. read more
The same way as anyone else. Donkey and Dragon get drunk. Donkey mounts Dragon. Donkey aims low and shoots high. And a while later, Dragon has a baby Dronkey. Or a Dongon. read more
The Dronkeys are the children of Dragon and Donkey. There are six Dronkeys at the end of the movie, Dragon arrives, greeting Donkey and behind her came six Dronkeys. Donkey refers to them as his"little mutant babies". They appear in Shrek the Third, Shrek the Halls, and Shrek Forever After. read more
Search for your question, it may have been asked and answered before. (This doesn't, of course, mean there isn't room for further discussion.) Wheaton's Law (Don't be a jerk). read more