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.

Nyra is the caretaker of the little hatchlings. She also nurtured the eggs that are found from the other dragons and go into the clan. Nyra is very caring and loving, and can watch the youngsters from a bird's eye view. She always warns the hatchlings not to let their thoughts wander in the waking world, for fear she might put them in a waking-dream state. Using this gift, she can put sweet dreams into the minds of sleeping young dragons.