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.

Despite her nature to distract others, Hypatia's home is a prestigious coast-bound institute, much to the ire of some of the scholars residing there but to the joyous delight of visitors when she can be seen. Even though Hypatia often distracts those not deep in thought from their everyday routines, the staff at the institute love her, as she sometimes provides much needed relief for overworked scholars when she's present. Many working at the institute would prefer to be swept up in gentle daydreams for days than succumb to intense frustration. In some cases, the daydreams Hypatia creates have led to new discoveries or inventions. One such example is a formula solution for miners to fend off the fevers brought about by certain insects.