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.

Loopy Luna is quite loopy indeed, or rather, she's quite loony. The other dragons never seem to understand her gibberish and many do not tolerate her childish antics. While other dragons are hunting on a full moon, Luna sometimes drifts stealthily and scares all the prey away with her loud raspberries and her strange gibberish. Woe is the hunter, because he'll be hungry with Luna floating by. No one knows why she is this way, and all claims that she had been born insane. However, there is one dragon who takes her seriously and had never considered her insane. It is this dragon who became her mate and is the only one who is privileged to see the dragon who she really is.