A dragon is a type of coloration on the betta. Usually you can tell what a dragon is because the scales look thicker -as if there's multiple scales piled on top of each other-, metallic scaling on top, and are often times outlined in another coloration. There's nothing wrong with being a dragon, it's actually a coloration that many people like the look of. SOMETIMES, however, the dragon scaling can end up on the bettas' eyes, hampering the ability to see somewhat.
Dragon:
NOW, that was just my rather bad explanation (: I'm sure some of the breeders would be much better at explaining.
Picture's aren't mine.