Presently, dragons don't spawn in the game right now. Getting access to the dragon transformation item the "intended" way currently requires you to complete some bullshit questline in Elis (the town that opens up after finishing the Dominion leg of the main quest) that's only available a few times per in-game month.
The much faster option is to transform into a slime by consuming a biojuice canister, using slime self-transform to turn into a dragon-morph, then enchanting a separate biojuice canister into a flesh conversion potion. A more verbose outline of that process
can be found here. The initial write-up was for turning slaves into dragons, but the whole process is entirely applicable to your player character as well.
EDIT: If you do this method on an alleyway NPC to turn them into a dragon, on inventory resets every ~2 weeks, it'll cause dragon food items to spawn in their inventories, which you can turn into TF items directly rather than having to do any more slime nonsense.