So if a wolf with no parents which is gen 1 then breeds with another gen 1 wolf they have gen 2 pups. But what happens if say a G3 and a G7 (random numbers :p) have pups what gen will their pups be?

The G3's pups will be G4 assuming you're breeding the G3 and any generation of 3 or lower, and the G7's pups will be G8 assuming you breed the G7 and any generation of 7 or lower.

It's always the highest generation + one

Thanks guys!