A dracoculus is a little dragon created through alchemical arts, specifically alchemical arts that capture draconic power. The chemical recipe for creating a dracoculus involves the maker's sperm or menstruation, but varies by maker otherwise. Those who do not produce sperm or menstruation can sometimes use that of another, but it requires much more draconic power.
Dracoculi are living, functional living dragons, but they do not have souls and cannot reproduce (these two things are not related). They usually stand about 4" tall. The process to create them leaves them with residual draconic powers and a bond to their maker.
Powers:
Dracoculi have the powers of a dragon, but not the lifespan to accumulate enough for the greater powers nor the body to contain enough draconic power to be truly magnificent. Instead, they have reduced scale powers of the five true dragons, mixed up with the powers of their maker.
The Recipe:
The maker must prepare their blood by infusing it with dragonsblood (if they are not already draconic). Then they must take their sperm or menstruation and mix it with dragonsblood as well, leaving it inside the repaired shells of a hatched dragon's egg for forty days. After forty days, this concotion will produce a transparent tiny dragon made of draconic power, and it must be fed the maker's blood mixture for forty weeks while incubating in the rehatched shell.