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.

Misty Dreams is a daydream dragon. She enjoys sending dreams to humans and other creatures when they sleep. She tries to make sure that her daydreams don't interfere with her receiver's schedule, but she is very capable of immobilizing a threat by forcing it into a long, nightmarish trance. Misty Dreams is very calm and she is not angered easily. Other dragons of the lair often come to her for advice, and she is a good friend with Midnight Jubilante, one of her clan leaders, since they have a lot in common and are both dignified, outspoken females. However, they do sometimes clash because they are both naturally very dominant, and this causes many problems in their friendship.