
Other mistake: Dante and The Agency both have extensive photos and videos of the team's previous exploits. Trouble is that most of it is simply stills and footage from the previous movies in the franchise, often occasions when nobody was around with a camera to witness and document what was going on, certainly not at the angles we see.
Answer: It was confirmed by the filmmakers that Dragon is actually Donkey's true love, and that when Donkey was a stallion she changed as well, supposedly into a talking pegasus.