While the location of the island is never specified, it clearly takes place in the Barbaric Archipelago less than a day away from Berk.
In a startling contrast to their enemy island Berk, Outcast Island is comparatively smaller and lifeless. This island is rocky, barren, and full of wild dragons which makes living extremely difficult for the Outcasts.
From the shape of the mountain in the island and the type of rock it is made from, it is possible that the island is a comparatively newer island formed from fresh volcanic rock, the mountain that very same volcano laying dormant.
Deep in the mountain, where they plan their attacks on Berk.
Where the Outcasts have their weapons made and sharpened. They are made from hard shells, wood and stone they find on the island.
Dragon Training RingEdit
Where they train dragons for their dragon army so they may destroy and take over Berk. They just need Stoick's son to train the dragons for them.
Dragons that they round up from their and other islands are kept until there trained in the ring above it.
Where their Captives, Hostages and Prisoners are kept.