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.

Cloudia is a beautiful Daydream dragon and causes amazing daydreams. She was actually once a male, and because of this, she was ashamed of her girlish name. Every time someone came near her, she would give them nightmarish daydreams just because of her name. When she was offered to change her name, she just ignored the asker, thinking they were tricking her. Just when she decided to fall into an eternal slumber to stop causing the nightmares, her "owner" came along. He decided to give her a potion that he had conveniently just made to change her gender. Now she lazily drifts around on clouds and sends amazing daydreams to everyone that passes.