Which is better for a dragon deck Horus the Black Flames or Armed Dragons and why?

Pros

• "AD LV3" can be searched via "Sangan", "Witch of the Black Forest", "Masked Dragon" and "Flying Kamakiri #1".
• "AD LV3" only needs to be on your field during your Standby Phase to level it up. Reborning it from the Graveyard or any other method of safely summoning during your Standby phase is a safe way to level up.
• "AD LV5" only needs to destroy a monster to level up (a simple task) and can be Tribute Summoned or Special Summoned outside a level up if needed.
• "AD LV7"'s effect destroys multiple face-up monsters.
• ADs can be used in a Wind-Beatdown deck using "Harpie Lady #1" and other Wind support cards.

Cons

• "AD LV5 and 7" require you to discard specifically monster cards.
• Using LV10 is really impractical since it only has 200 more ATK than LV8, effect is generally the same and is a "dead card" in your hand until you get out LV8.
• NONE of the ADs can destroy face-down monsters with their effects.

Pros

• "Horus LV4" cannot be taken by your opponent while it is on the field and has decent enough attack to destroy a monster in battle to level up.
• LV6 only needs to destroy a monster to level up (a simple task) and can be Tribute Summoned or Special Summoned outside a level up if needed.
• LV6 also is unaffected by Spells (like "Swords of Revealing Light", "Molten Destruction", "Shrink", "Enemy Controller", Equip Spell cards, etc.)
• LV8 can negate any Spell that is activated leaving you with a 3000 ATK monster that can only be taken down in battle (not likely) or by Traps.
• Horus can be used in a Negation deck to negate Spells while Jinzo/ Royal Decree negates Traps leaving an opponent with only monster effects to use.
• LV8 can be discarded for "Trade-In" if needed.

Cons

• LV6 is unaffected by practically all of your Spells that could benefit it. ("Level Up!" will still work to bring out LV8 because LV6 is sent to the Graveyard as a cost to activate the card; just an fyi.)
• LV8 only negates Spells that are activated. Spells that are already on the field like Continuous Spells will still work like LV8 was never on the field.
• LV8 is the essential monster to get out; the previous LVs don't have as damaging or game-winning of an effect.
• None of the Horus LVs are searchable by conventional means except LV4 with "Witch of the Black Forest". You're going to need a bit more luck and skill going through your deck to get Horus out.

Overall, Armed Dragons are easier to obtain, have some good monster destruction effects and have some nice ATK stats. But to be honest, their monster-destruction effects have been duplicated into better and easier to use cards since they were printed ("Lightning Vortex" and more). Plus they need protection with Spells and Traps; a single "Smashing Ground" or "Sakuretsu Armor" will finish them off and you'd have to start over again. At least the ADs do work in a Wind/ Dragon deck or can work with a plain Dragon deck and use "Masked Dragon" to search out LV3 and other Dragons. The ADs can discard monsters to fuel a "Dragon's Mirror" summoning of "Five-Headed Dragon".

Horus is a harder to get card set, but is more worth it. They have more ATK, can protect themselves to some extent (LV8 even more so) and have been used Negation decks. However, they don't really blend with in as well with Dragon decks because they can't depend on or utilize other Dragon cards as well as the ADs. And none of the LVs can be searched through your deck easily, so some cards should be committed to draw through your deck or any other means of slimming it down. It is possible to ditch having LV4 in your deck and just try to Tribute Summon LV6.

It's up to you to decide which Dragon is better: Armed Dragon are good and easier to use in Dragon decks and Horus is more of a stand-alone card, but can used in Dragon decks if wanted.