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.

One of the dragons living in the Naito Caverns, Pheus is shy and cautious. When approached, she will more often than not flee to a hard-to-reach corner on her fluffy dream clouds. She has a mate, but doesn't like him- she was coerced into being his mate under threat of having her deepest secret revealed. She is hopelessly in love with Nightmare of the Wizado Caverns, but can never have him.