A nest holds dragon eggs to incubate. If the egg is ready to hatch, a READY button will appear on top of the egg. At this point, you may tap on the nest to place your newborn dragon in an available habitat. If you don't have an available habitat which isn't full, a 'buy a new habitat' button will show instead. You may buy a total of four nests. The first one comes with the game (free), while the rest cost an increasing amount of gold.