Assuming (as the evidence seems to suggest) that Smaug was not a refugee from Angbad, then Dragons must have some form of propagating themselves without Morgoth's active intervention. So, unless they are hermaphroditic, they must come in both the male and female variety.
The source of Dragons is a thread which touches on this issue. I will stick with what I posted there, although it is (and in all likelihood can only be) speculation:
Quote:
As to how Morgoth came to create Dragons, this is, as some have already said, a matter of pure speculation. My own theory is that they originated from large reptilian beasts which originally inhabited Arda (similar to dinosuars). Morgoth imbued these beats with disembodied spirits (Elves, or possibly Maia), thus giving them awareness and intelligence, and proceeded to breed them for certain characteristics (resulting, ultimately, in the winged variety).
The fact that Dragons were created by Morgoth does not preclude them breeding amongst themselves, assuming that there were females as well as the males that we hear of. Orcs, I believe bred amongst themselves. Assuming my theory above is correct, there is no reason why female Dragons should not have existed, since the original beasts from which they were created would have been both male and female.
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Edit: To fix the link
<font size=1 color=339966>[ 10:17 AM January 28, 2004: Message edited by: The Saucepan Man ]