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.

High up in the eastern mountain range, almost exactly half the way to the top of the highest peak, there's a large, peaceful lake fed by a subterranean source. Living in that lake is a small pod of Waterhorses. Around the lake there's a wide area of meadows and alps, providing rich nutrition to a variety of animals as well as a home to a group of Ridgewings. Although these two breeds seldom have an opportunity to meet, these specific Waterhorses and Ridgewings have formed a close bond, living together as one.

Miqi appears to be a very friendly dragon. He has a bit of a squeaky voice and often tells funny stories to the hatchlings—who all love him. Looking farther than first impressions though it becomes clear that Miqi is far from the friendly uncle. He is a rather cold and manipulative individual, using his sway over hatchlings to extort favours from their parents, turning the little ones into unwitting minions in his quest for more power and influence.