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.

Hakuin Chi is the only child of Shim. He is Shim's biggest disappointment. His mother is Geometric Prism, and she is a rather mean dragon. Hakuin Chi inherited his mother's temperament, which wasn't much of a surprise; Shim's personality is very quiet, and wasn't expected to show up in his children. Needless to say, Hakuin Chi is a real problem. He has been chastised many times by his owner for the terrible things he has done. Daydream dragons are very peaceful, normally, and Hakuin Chi tries very hard not to conform to that stereotype. All his daydreams involve burning things.