Controller:

using System.Web.Mvc;
using System.IO;
using DotNetNuke.Web.Mvc.Framework.Controllers;
using DotNetNuke.Web.Mvc.Framework.ActionFilters;

namespace Wiremayr.Modules.DropzoneHandler.Controllers
{
    [DnnHandleError]
    public class DropzoneController : DnnController
    {

        public JsonResult Upload(int itemId)
        {
            string imageUrl = string.Empty;
            string imgPath = Server.MapPath("~/Uploads/");
            if (!Directory.Exists(imgPath))
            {
                Directory.CreateDirectory(imgPath);
            }

            foreach (string s in Request.Files)
            {
                var file = Request.Files[s];
                if (file.ContentLength > 0)
                {
                    string fileName = Path.GetFileName(file.FileName);
                    var path = Path.Combine(imgPath, fileName);
                    file.SaveAs(path);
                    imageUrl = string.Format("~/Uploads/{0}", fileName);
                }
            }

            return Json(new { img = imageUrl, thumb = imageUrl });
        }
    }
}

Dropzone:
Dropzone.options.wmUpload = {
        paramName: "file",
        parallelUploads: 3,
        url: '/DesktopModules/MVC/DropzoneHandler/Dropzone/Upload',
        autoProcessQueue: true,
        addRemoveLinks: true
    };

Notice that in the error message it indicates the error is "in '/desktopmodules/mvc/DropzoneHandler' Application", meaning that a separate application was created that's not the root application. Look in IIS for a new application or virtual directory setup in the path and then delete it. Visual Studio will "helpfully" do this for you sometimes when setting up projects.