Pets downloaded from the workshop are stored at:
C:\Users\(user)\AppData\Roaming\DesktopPet\UserData\profiles\databaseDownSteam
This folder does not include the built-in pets,
however I don't know where they would be.

Each pet is defined by 2 files:
A JSON file, and a PNG sprite sheet.

For examples of the JSON file and sprite sheet
you can look at the files of the workshop pets.

All you need to do to add your custom pet is to add those
files to the folder. The app will automatically detect them.

You can use a JSON file from another pet as a template
so you won't have to create a new one from scratch.

Attribute "name" defines the pet's name.
Attribute "img" defines the PNG sprite sheet name.
Attributes "width" and "height" define the pet's dimensions in pixels (it's usually gonna be 128x128).
Attribute "animePos" defines the pet's animations. Each animation has their own attributes.

Animation "stand" is the idle pet sprite.
Animation "crawl" is the animation for when the pet hangs from the top of the screen.
Animations "climb", "walk", "jump", "fall", and "drag" are self-explanatory.

I haven't tested this for all of the attributes, but if you don't define these
some pretty wacky things happen to your pet when the undefined animation is supposed to play,
and you will need to close and restart the app to fix it.

You can add custom animations with custom names (other than the ones above).
These custom animations will be played at random when your pet is on the ground.

Each animation has a "line" and "count" attribute.
Attribute "line" defines which row on the sprite sheet the animation is on.
Attribute "count" defines how many sprites the animation lasts.

The PNG sprite sheet defines the pet's sprites.
Each row corresponds to an animation.
The sprites go from left to right.

For the falling animation, the first sprite is used
for when the pet is actually falling, and the other
sprites of the animation is used when the pet lands.

Note: Make sure your sprites face right (unless
you want your pet to moonwalk everywhere).