Alrighty people, recently I had started re-reading a book about different ways the many species of animals reproduce. It included mostly insects, and that inspired this!
Dream and Nightmare are capable of both insemination and egg-laying, but they need a partner in order to reproduce, since their body rejects their own semen. Though, can mate with each other and produce offspring since their body doesn't reject the sperm- *cough*dreammare*cough*.
They also have something called a spermatheca, which stores living sperm from another monster for a period of a few months to years. This means that they can copulate with a monster of their choice and much later can then fertilize themself and produce offspring. This is extremely helpful for both of them, as it avoids surprise pregnancies and can also give them the upper hand at choosing whom the other parent of the child would be.
Ink and Error reproduce parthenogenetically. They have little use for males or females because they do not need to reproduce with one or the other. Once they reached sexual maturity, every 20-25 years they develop a child soul for a few months then lay a fertile egg containing the soul. Even if they had abandoned the egg, they are more then likely to have produced offspring somewhere in the multiverse as there are monsters whom have found and taken care of the eggs they have abandoned.
Blue and Cross are similar to Dream and Nightmare in the way that they are possible of both insemination and egg-laying, but they differ in the fact that they do not have a spermatheca. Another thing that they differ from is that they both can release a sex pheromone that is highly attractive to both male and female monsters. Sometimes this sex pheromone can be released without their knowledge, but this is generally rare and often once they notice they immediately can stop the release of it.
In my headcanons, pregnant monsters (with the exception of certain fish monsters and Boss monsters), instead of giving live birth, lay an egg that contains the fully developed soul inside.
This is a stage where the soul will soon get a form based on the "code" from the two parents. Both the pregnancy stages and "code" hcs are explained in Pregnancy, a Dreamswap fic on Ao3 that needs a bit of updating- I've gotten some research done on canon information but not everything's 100% accurate. To find the headcanons, either go to the end notes of the story or the comments for the former or latter hcs.
Another good headcanon read that would help understand this more is a chapter in Bad Moon that is also found on Ao3. I'll copy/paste it here.
"... monster sperm has mostly magic and some sperm cells, and without the special magic, called magici soulitem, made by the adult monster's soul that is used during ejaculation, there would not be any soul to ... impregnate. This magic ... makes a soul with half of the pregnant parent's genetic information ... [the sperm gives it the other genetic information] ..."