It appears that Dreamworks is doubling down on the prospects of turning 'Dragon' into a viable franchise, commissioning two separate scripts for the sequel, to be written by the film's directors, Chris Sanders and Dean DeBlois. The report from the TAG Blog states that both directors had differing ideas for the sequel, but that they "sort of tracked together".
What that means exactly nobody can be sure. The possibility is that both stories could be combined to produce one film. What I think is more likely is that the stories will be merged to create an overarching theme that will encompass the next two features.
However it turns out, it looks like Dreamworks has found it's lead dog to replace the concluding Shrek franchise.