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.

Hypnosis is Princeling's best friend and the trickiest, most sly, dragon in his clan. He uses his power of daydreams to create almost a hypnotic state in his victims, and can use it to influence other dragons, and even humans. He believes that Princeling is actually royalty and he attempts to use his abilities to try and "Get his domain back." He is both cunning and stealthy, so all dragons in his clan are always on guard for Hypnosis, who continues his quest for domination.