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.

CloudRibbon was the first female to seek out a home in WaveRibbon's new colony. She had been chased out of her lair by intruding dragons and forced to abandon her eggs and her home. She traveled east and came upon a beautiful paradise. CloudRibbon settled on a cloud and began dropping daydreams on the dragons below her. Finally, the Magi dragon, CitrusRibbon discovered her and knocked her off her cloud using magic. WaveRibbon, the leader, welcomed her to stay in their home and she accepted. Currently, she sits on her cloud still dropping daydreams, but being careful about which dragons they land on.