Waterhorse Dragons received their name due to their horse-like physique and endearing behavior. They are capable of surviving out of water, and when on land their skin secretes a gelatinous goo to retain moisture. However, their large paddle feet are better suited for swimming, and waterhorse dragons tend to move very awkwardly when on land. Waterhorses are very friendly dragons and enjoy playing with humans.

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.

High up in the eastern mountain range, almost exactly half the way to the top of the highest peak, there's a large, peaceful lake fed by a subterranean source. Living in that lake is a small pod of Waterhorses. Around the lake there's a wide area of meadows and alps, providing rich nutrition to a variety of animals as well as a home to a group of Ridgewings. Although these two breeds seldom have an opportunity to meet, these specific Waterhorses and Ridgewings have formed a close bond, living together as one.

Nelno is a good friend of Pifma and simply can't accept that neither of them will ever participate in "kick the ball with your hindlegs". He secretly works on developing a small, dense 'ball' that will show similar properties under water as the real ball does on land. He and Pifma will be only the first to play "push around the sphere with your fins", he's sure of that.