they can not get pregnant they have a baby come in on a hot air balloon a mix of the mom
and dad cat or dog and then the baby animal has to grow up in order to leave the basket

To firstly get that hot air balloon come, there is some kind of furniture already
existing. It looks like a dog house and you can only get it from the shop at home. There
is more kind of those but I don't remember nor the name or the look. You will have to take
a normal human to talk to this dog. Try out the different actions,it is then supposed to
show the names of the other pets in this house. Wou will surely find out where he/she goes
talk to another pet(It might refuse). Then they will together go in that house and they
will later come out of it.
HOT AIR BALLOON
You will have to take care of the pet in basket till it leaves it(Some times later).