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.

Daydream is in charge of all the dreams in the cave. She makes sure as many dragons and people in the cave as possible have nice dreams. If she's in a bad mood or has had a bad day, there might be one or two nightmares that night. Daydream has a fairly even temper and tries her best to do her job, but sometimes she just wants to sleep herself! Her job usually keeps her up late, so she sleeps in extra in the morning. When she's sleeping, everyone is warned NOT to wake her up. If she's woken up from her sleep, she'll often be cranky the rest of the day and almost everyone will have a bad dream that night. Because she sleeps most of the day she's also a common prank target. It's not uncommon for her to wake up with a mustache or covered in star stickers. Because she's understanding and humorous, she usually laughs it off.