Daydream Dragons are the hosts of daydreams and fantasies. They spend the majority of their time sitting on clouds, dropping daydreams down into the minds of people passing by. Humans who live near Daydream Dragons must be especially careful not to let their thoughts wander, or they could end up spending hours or even days in a trance-like waking dream state.

Dragons are highly-intelligent reptilian creatures that—from a human perspective, at least—appear to live forever. Many different varieties of dragon exist, each with their own unique qualities, habitats, and behavior. Adolescence in dragons is usually marked by the growth of a hatchling’s wings, although not all breeds of dragons grow wings and some breeds have other traits that indicate the beginning of maturation. In Galsreim, dragons and humans coexist peacefully.

Carl (full name's translation: "tiny Carl Jung") is a dreamer: of that there has never been any doubt. He often prefers books, banter, and storytelling to the dramatic exploits undergone by other dragons—but make no mistake, Carl's head is not wholly in the clouds. His studies of the draconic condition have made him keenly sensitive to the details of his companions' thoughts and feelings, sometimes more so even than they. Tell him about a problem or narrate a dream to him, and you are certain to come away from the conversation more aware, more enlightened, more awake.