All the evil races and creatures in Middle-Earth are descended from ordinary, harmless creatures or races that were enslaved to the Dark Lord's will and bred into their final form by the Dark Lord.
So where do dragons come from?
One would expect that dragons must come from something very powerful.
I think that the Dragons were descended from Sauron himself and a female Balrog.
I think that when Sauron and the Balrogs still had the power to change their shape at will, that Sauron and a female Balrog took the shape of a real kind of lizard native to Middle-Earth- remember that Morgoth could by that time only create things in mockery of other things- only huge, not tiny like the original creatures- and mated, and that their offspring was the first dragon. Later, Glaurung's descendents were given the wings of a real species of Middle-Earth bat, only huge and enchanted, and thus winged dragons were born.
It would explain a lot. Balrogs are fire spirits. Dragons breathe fire. Sauron has great mind powers. Dragons have some powers of mind control. And it would explain where Morgoth- and later Sauron- got such a powerful race of creatures.
The Maiar can have children when in corporeal form. Melian did- and she was the mother, she was the one who actually got pregnant.
Anyway, just a theory. What do you think?
David S. Annderson