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.

Every night, this dragon flies all around the lands belonging to her owner and even down to the nearby villages, sending sweet, good dreams to the well-behaved children and hatchlings, and terrible nightmares to those who aren't. Not many have actually seen her, much less learned her real name, so she is simply referred to as "The Dream Faerie". During the day, she sleeps in her own private meadow, but keeps an eye on the young ones thanks to her small, enchanted scrying pond.