Uncut Dragonstone's are used to make the infamous Ring of Wealth. It's very simple to create Ring of Wealth from an Uncut Dragonstone. Simply use a Chisel on it, Grab a gold bar and Dragonstone Enchant with a Furnace and ring mould. Dragonstone + Gold Bar + Ring Mould = Dragonstone Ring, then all you have to do is enchant the rings.
What Drops Dragonstones:
Tormented Demon (Known to drop up to 10 at a time)