Dragon roosts are naturally generating structures that spawn stage 3 dragons.
They appear as charred/frozen patches of land with chests, piles of gold/silver, and charred/frozen cobblestone structures, made to look as if the dragon has destroyed it, leaving ruins behind.
It spawns a stage 2-3 fire or ice dragon depending on the roost. Usually, with fire dragons there are numerous burning trees/grass around. Their generation can be configured in the mod's configuration files to be increased or lowered.