Once your dragon has hatched (some hatch immediately while eggs from Toothless Exploration take time), you will be given the option to Place the baby dragon or Release it.

 

Place: If you choose to place the dragon, you will be able to place the roost anywhere on your Berk where there is enough space for the roost. A grid will be shown to facilitate this for you, with the roost displaying in green if it can be placed or red if there is not enough space. You will also have the cancel and Hangar options available, both of which store the dragon in your Hangar.

 

 

Release: If you choose to release the dragon, you will be shown the resources (Fish and Raw Amber) you will receive in return for releasing the dragon, which you can confirm or cancel.

 

Note that placing, releasing, and storing your dragons can be done at any time, not just at the time of hatching. You can place/move dragons on Berk or in your Hangar at any moment, you can choose to release any existing dragons you own, and dragons on Berk can be stored in the Hangar to make room for others.