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.

PARANOiA 300's presence makes those around her feel as if their worst fears are about to come true and so far as anyone can tell she is not immune to her own mostly-uncontrolled magic. Unsurprisingly, she has trouble sleeping; but she has been known on occasion to trust Healing-D-Vision enough to take sleeping potions from her (but not other whites, nor Tabld the alchemist, who mixes the potions). Some claim PARANOiA lures strange demons that feed on fear to work uncouth magic for her, including the similarly unproven curse on D-Vision's staff. No dragon who might have actual knowledge of these matters has shared any comments to confirm nor deny these claims.