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.

The legend of Mare Luna is a sad one, starting with a young farm girl and ending up with her murdered and betrayed by her family. The spirit of the girl was said to have left her body and morphed into the form of a vengeful water horse. The water horse sat at the bottom of a nearby lake for years. The original sadness she had felt at her family's actions soon turned to rage and grief, then transformed further into blind fury. Every full moon Mare Luna is said to summon a fog to blanket the earth and stalk the fields near the village by the lake, searching for people with hidden wrongdoings. Her power and anger is said to peak on the harvest moon, where even glaringly innocent people are dragged into the lake and to their doom. Many people brush the legend of as just a bedtime story, as there is no concrete proof to back it up. But the farmers have a curious dread of the moon-lit foggy nights, and instead of harvesting their crops they prefer to reminisce about lost friends by the fire.