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.

Lady of the Dreams does not hold an affiliation with Lord of the Dreaming (and in fact chooses to avoid what she considers his 'dull pastimes'). She prefers to spend her time with those newly hatched, calming them down when necessary with lovely daydreams or whispered lullabies captured in a cloud. Lady also helps out stressed or high-strung dragons with her soothing effect; in a couple of dire cases she has been called upon to sedate dragons against their will (such as the case of Vesta when she worked for ten days straight on her forge without rest at the expense of her health and sanity). Lady is generally calm, serene and kind, an amicable partner for conversation as well as a good friend to any dragon in the clan.