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.

Lore's best friend is her fluffy cloud. When she's not sleeping on it, she's busy looking for cloud pieces to make it even softer, or trying to keep it in certain shapes. The cloud itself often acts as if it has a mind of its own: the few times that Lore is not resting or sleeping on it, it will follow her wherever she goes. For the young hatchlings those moments are worth millions. They stalk Lore and her cloud, and try to climb on top of it while she's not looking. The Daydream Dragon allows them their fun, at least until she wants to rest again. At that moment, she'll chase the hatchlings away and lead the cloud back to its place high in the sky, where they'll spend hours daydreaming together.