THE DRAGONS
When standing on all fours, a typical full-grown dragon is about 3 times as tall as a human. They are quadrupedal with opposable thumbs, with four legs and two or four wings, and can reasonably be expected to remain in the air for at least several hours at a time (and that's the low limit for sick or malnourished dragons).
Some dragon species can breathe fire, but no dragon species has inherent fire resistance. There are a few other 'inherent' abilities like ice breath, a venomous tail stinger, breathing underwater, and silk-weaving. Also, some of them have 'superpowers' of sorts that are not normal for their sub-species, such as super-hot scales, mind-reading, future sight, or the ability to communicate with plants and accelerate their growth due to circumstances of birth or genetics.
They are social creatures, and their societal structures at the moment are largely made up of Medieval Monarchy-dominated kingdoms. By some fluke of convergent evolution, they ended up with emotions, thought patterns, and psychologies nearly identical to humans despite having started at the top of the food chain rather than the middle.
They do know that some humans exist on the planet with them, but in their minds, humans are prey creatures noteworthy for making little metal daggers and wood/stone dens for themselves. They are technologically and socially behind the dragons, and the dragons have absolutely no clue that other, crazy-advanced humans are hanging around up in orbit. The realization that there are humans up on a metal palace in the heavens who have unlocked the esoteric secrets of trapping and harnessing lightning, traversing sections of the sky where the air is thin enough to cause a dragon to suffocate, and giving traits from one creature to another is going to come as a big shock to the dragons.
THE HUMANS
The humans abandoned earth in favor of a space station in earth orbit for a time due to an incoming extinction event, and the dragons evolved and took the humans' place in the grand scheme of things while they were gone. There are still humans on the surface that didn't retreat to space, but they are at a medieval tech level, slightly behind the dragons.
Human technology stagnated during their time in space due to resource-conservation measures, but still managed to reach near-futuristic levels. For example, they have reliable spacecraft (that are sadly not capable of FTL travel), holographic projectors that can be paired with motion sensors for a 3D interface or used to cloak a ship from view, tiny chip-like implants that can monitor vitals and brain activity, and experimental Directed Energy Weapons that are actually fairly practical, if a tad unreliable. They haven't changed much, aside from limited forays into genetic engineering; they have yet to figure out how to make entirely new DNA, but they can 'map' known DNA patterns onto a living person's genome, curing genetic disorders.
Note that the humans are capable of communicating with the dragons through a 'translation device', despite the fact that neither of them is capable of speaking the other's language, but as a general rule they don't bother communicating.
The humans have a pretty distinct technological advantage over the dragons, but the dragon's abilities might tip the power balance back in the dragon's favor, and the humans are aware of this.
THE SITUATION
When the humans first sent down their scouts to assess Earth's status, they were pleasantly surprised to learn that their homeworld was habitable and some of their kind had survived, albeit in a primitive state. Unfortunately, the humans had been ousted from their top position in the game of life in favor of dragons, who have all the advantages of sentience and opposable thumbs paired with the fact that they are 20-foot tall apex predators. In fact, the Dragons even hunted the humans who remained on earth for food or kept them as pets! So the humans decided not to descend back to earth en mass, thinking that a cautious approach was best.
The dragons quickly perked the human's interest. For one, they are, much like bees, able to fly despite the fact that conventional physics tells them that their wings wouldn't allow them too. Plus, they'd really like to figure out how to get some of the dragon's abilities (anyone in favor of getting Telepathy?).
Now, to get these abilities, they need to map dragon genes onto their own genome, and to do that, they need dragon genetic material. And they concluded that the best way to get this genetic material was to abduct live dragons seemingly at random from the planet and subject them to horrifically inhumane medical experiments that often leave the dragons dismembered, traumatized, and/or dead. And at absolutely no point will they reveal themselves to any dragons aside from the ones they kidnap, ruling out all possibility of negotiating with a particularly amoral dragon monarch who's willing to trade her own subjects for advanced technology.
And that leaves my main question: Why would they pick this horrifically amoral and seemingly impractical method of acquiring dragon genetic material? Note that their reasons don't have to be legitimate ones. They just have to seem legitimate to them, such as religious doctrines or ****ed up economics.