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.

Foggy Illusions is a daydream dragon. He is very mysterious, and his pink cloud often shrouds him in a fog-like cover. He enjoys sending humans strange and illusionary daydreams, and he loves tricking them into thinking that there are walls blocking their way when in reality, they aren't there. Although many dragons perceive him to be a strange or even evil dragon, he is not mean or cruel, and his daydreams cause no harm. Rather, they are only confusing, and he finds the bewildered looks of the humans very funny and amusing.