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.

Cloud Dreamer is not the nicest daydreaming dragon as he send bad things into people's minds. His master usually tries to correct his behaviour but he doesn't listen and tries to send bad things into her mind. One day his master was tired of his naughty behaviour and asked her female daydreaming dragon Lovely Dream to see if she could help him be a good dragon. At first it looked like it wouldn't work but Lovely Dream was able to help Cloud Dreamer be good (although he sometimes is naughty) and they became mates.