The data sets the Dgraph queries are stored in databases. For high availability, these can be stored on HDFS or a shared NFS. They can also be stored on the local disk for a non-HA option.
The location you choose determines the database requirements, as well as where the Dgraph will be installed and its behavior.
Regardless of where you put your Dgraph databases, be sure to increase the allowed number of open file descriptors on all Dgraph nodes. Otherwise, the Dgraph may crash.