"You four have merely scratched the surface of your full potential."
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The Spirit Coves is where the four Dragons had migrated to, in order to reach adulthood.
History
Snakebit
The Ninja try to ride their dragons to reach Ed & Edna's Scrap N Junk. Sensei Wu tells them that it is time for their dragons to reach their adulthood and go to the Spirit Coves. The Ninja reluctantly let the Dragons fly off, leaving them without transportation.
Day of the Great Devourer
During the battle between the Ninja and the Great Devourer, the snake was becoming increasingly unstoppable, to the point that it had Nya and Lloyd (piloting the Samurai X Mech) trapped in its mouth. Suddenly, from the skies came a loud roar, which was quickly revealed to be the four dragons that the Ninja had lost to the Spirit Coves some time earlier. Wisp, Rocky, Flame, and Shard had gone through a metamorphosis together, morphing into a combination of the four dragons.
Later known as the Ultra Dragon, it flew down at the Devourer, knocking Nya and Lloyd out of its mouth. The snake immediately retreated, climbing up a skyscraper, and roaring at its attacker. The Ultra Dragon managed to damage the Great Devourer, flying over it while breathing out separate blasts of its four elements. This seemed to be gaining the Ninja a great advantage in the battle, but when the Ultra Dragon turned away to swoop back down, the Great Devourer struck back with its massive tail and injured the Dragon brutally.
Ultra Dragon later returned to the Spirit Coves after Lloyd's battle with the Overlord, and has since remained there.[1]