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.

A Good Dream or A Bad One tends to make people have crazy, sometimes scary, daydreams. He doesn't mean to, but he knows he does because when the person snaps out of the dreamy state, they often have a look of horror on their face.  In the daytime, he sits on the lowest cloud he can find, staring down, waiting for a passerby to influence. He practices giving nice dreams, but it doesn't work. At night, when the streets are bare, he slips down to the nearest house to practice. It never works, so he tries to keep away from children.