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.

Dream of Sunny Day is a tribe dragon, so his nickname is Dream. Like all Daydream dragons, Dream likes to give people daydreams. One day he went too far. Another male Daydream dragon from his tribe had challenged Dream that he could give better daydreams then him. Irritated when he realized that the other dragon was right, but not wanting him to know that, they set up the first Golden Daydream competition which would happen three days from then. As soon as the sun had set and the others were tired from a long day's work of giving daydreams and had begun to sleep, Dream set off to find Blaze of Raging Fire. Blaze was a powerful Sunstone dragon, whose orb could create high forms of magic. After about 1 and 1 half days' search, he found her, and fell in love. Reminding himself about the competition, he asked her for a spell that would let him give powerful daydreams. He returned to his tribe on the third day, and won the competition, but soon after his daydreams took a hold of him.