it's a magical dragon so I'm guessing their true love became a baby. No pregnancy, just *poof* there's chibi. It's best to never question yaoi logic too much ;)
True :D "poof" was the best ^^ But we can try to imaginate that it was similar to yaoi Yappa no Amanem, though there was demon iinstead god :)
There is several possibilities. On how, which relates to who. In some ideas a male can get pregnant with another male if the other male is a magical creature or a god. The other possibility is that love was so strong that a baby was born of it. again due to the fact magical creature influence. The 'god' could have the same features as kiff from futurama when in love, that the skin becomes a membrane taht can affect genentic dna that since his love touches him most gave them the kid. My favorite theory is that the seme gave something to the uke to create a temporary uterus. most often refered to in sex(love) pistols, where they have sex and boom with baby. However Not sure still. as I am always questioning where the seed came from. Best bet is magic. after all isn't the phrase "can't explain it? wizard did it!" quite popular?
Who gave birth to Chibi? And how?
Inquiring minds want to know.