Your dragon stats increase automatically when you level; there are no assignable stat points, just skill points.

However, there is equipment with a +40% hit point or mana bonus (the former being preferable since mana regenerates fairly quickly in dragon form), as well as +40% offence or defence (again the former is preferable, IMO; there is a Dragon Shield spell that can temporarily boost your defence, as well as a summon spell that can provide a bit of a distraction).

You should at least have 1 level of Dragon Spirit, and can hotkey potions for the (usually rare) cases that isn't enough. After you get the battle tower you can sell off all your lower level potions and just make/keep the highest level healing and rejuvenation potions available.

Runners and Tower ? / Very low success rate with Fanny Blossom? (DKS topics, though IIRC the minor differences from D2:ED are mentioned)