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.

An odd sort of Daydream dragon, The Magic Eagle seems to be stuck in his own sort of daydream, forever laying about in the clouds in a trance-like state, seeing and imagining things that he swears are true.  One of his most common visions is a large eagle, black and white, flying over a small house with many trees and flowers squeezed into every space in the yard.  A young human sits underneath one of these, an immense ginkgo that has almost outgrown the space allotted to it.  The human's upturned face smiles with joy at the sight of the eagle, and it begins to descend.  It is here that the vision stops, leaving The Magic Eagle feeling very melancholy and sad for reasons that he can't quite explain.  He spends the majority of his time either thinking of this vision or reliving it, and it is this obsession that has driven him to stay eternally up in the clouds, searching for the magic eagle that is his namesake.