The False Dragonets were the 'backup plan' of the Talons of Peace. All of their parents are members of the organization, with the exception of Fatespeaker, whose parents are unknown. Flame is the replacement for Glory, Ochre is the replacement of Clay, Squid is the replacement of Tsunami, Fatespeaker is the replacement of Starflight, and Viper is the replacement of Sunny.
Not too long after the brightest night when the eggs hatched, Nautilus, the leader of the Talons of Peace, decided that it would be best to have a backup plan, in case the real dragonets were unsatisfactory. He included his own son, Squid, who hatched around the correct time. Viper, Flame, and Ochre were donated by their parents, who were also Talons. Morrowseer, after being informed of the Backup Plan, gave them Fatespeaker the NightWing. She hatched a few months after the brightest night, possibly meaning that Morrowseer wasn't notified until it was already underway.
The real dragonets were not told that they had replacements; the false dragonets were not told that they were replacements, either. While the dragonets had vicious guardians, and had to grow up as a team, the false dragonets were presumably spoiled, or at the least treated as normal dragons, and grew up to hate each other. Viper and Flame, especially, were violent to all of them. The false dragonets, in fact, were not actually told that they were "part of the prophecy" until they were almost seven; however, it may just be that Squid wasn't told at all.
The dragonets' guardians were never informed of the backup plan, as they probably would have objected. Because of this, Blister and Morrowseer sought them out to kill them, brutally.
At the beginning of The Hidden Kingdom, the dragonets are shown to be fighting. They are also unimpressed by Morrowseer; in fact, Fatespeaker is delighted, thinking that one of her prophecies came true. They were later taken to the Night Kingdom, to everyone's displeasure except Fatespeaker's, though she was disappointed. Fatespeaker later brightens upon seeing Starflight brought in, leading into the next book.
In The Dark Secret, it is shown that they can work together, as they all (excluding Fatespeaker) managed to work together to chase away Starflight, as well as when they tried to convince the SkyWings at their outermost outpost. However, they still hate each other, except for Fatespeaker, who is naive and believes that the others are her friends. After they fail to convince the SkyWings at the outpost, and after being rescued by NightWing soldiers, Squid "quits being a dragonet of destiny," though he isn't serious. However, Morrowseer bans him from the NightWing island, abandoning him to die in SkyWing territory.
During a battle training session, Viper attempts to kill Fatespeaker, blaming her from being stuck in the Night Kingdom. Starflight saves her, however, and Viper incidentally slices Flame's face with her tail barb and then falls into the lava, presumably dying. It is then that Starflight realizes that the False Dragonets cannot be dragonets of destiny, as Flame and Ochre were both born a few weeks before the brightest night, as well as Ochre possibly being from a normal egg and Fatespeaker hatching a few months after the brightest night. Starflight confronts Morrowseer, who refuses to answer his questions. Fatespeaker mentions that she was born after the brightest night, meaning that she possibly knew all along that she was not a dragonet of destiny.
However, Flame is taken to the Rainforest Kingdom by Starflight and Fatespeaker, and is given cactus juice as a cure for his SandWing venom scratch. Fatespeaker currently resides in the rainforest, after she escaped the Night Kingdom's destruction. Squid was rescued from the Sky Kingdom by a Talon spy, possibly Avalanche, and Nautilus takes him to a meeting with Morrowseer and Blister, though Morrowseer never shows up, as he presumably died in the volcano eruption.
In Moon Rising, it is revealed that Fatespeaker helps out with events at Jade Mountain Academy and she still says that she has powers, even though she knows she does not. Later Moonwatcher telepathically asks Darkstalker if she does have powers. He replies with, "maybe but I'm not sure."
In Winter Turning Squid appears briefly as a part of the Talons of Peace and was the first to approach Winter in a "stealthy" manner, and almost gets killed by Winter because of his manner.
Squid - the SeaWing dragonet tends to act spoiled, and is also rather immature for his age. He is obsessed with treasure, and is constantly bullied by the other False Dragonets, which is not helped by the fact he is rather small and weak. He thinks he should be the best of all five, and never wanted to share with anyone else.
Fatespeaker - the NightWing dragonet is the least spoiled of the five, and has "visions of the future." She often brings up her visions, oblivious to her "friends''' annoyance. She is naive like Sunny, and is very daring and rebellious. She seems to think that the other False Dragonets are her "friends", despite the fact that they all dislike her. She is described as talkative.
Flame - the SkyWing dragonet is rather violent. He doesn't like the company of the other dragonets, with the possible exception of Viper. He enjoys tormenting the others with her. However, Viper scratched him with her barb on accident, wounding him severely. He also has deadly hopes of being an assassin one day. His mind is drowning in anger and hate.
Viper - the SandWing dragonet is rather like Flame. She is violent, and hates the other dragonets with a passion, with the possible exception of Flame, who she torments her "friends" with. She has a special hate for Fatespeaker, wanting to kill her on several occasions.
Ochre - the MudWing dragonet is always hungry, like Clay is, but way more excessively. Squid describes him as a bully; however, this has yet to be proven true.