Within the bubbling Dream-circle, no life could ever thrive. The sheer positive chaotic energy, light, and thus heat that is generated by the incubatory liquid cloud is too much for any physical life-form to handle, to any degree whatsoever.
However, there is one thing unaccounted for by most when discussing the Dream-circle, which is the presence and purpose of nightmares and what they accumulate to within the Dream-circle.
Enter Egregorians, a horrific, living blood-clot in the somnic energy flow, the result of nightmare bubbles once they burst and the miasmic cloud-fluid slowly finds way to its kin, and so they conglomerate into these horrifying beasts. Disgusting, wretched, chimaeric & aphysical creatures that exist fragmented and partially on many dimensions but wholly on not a single plane.
There is no uniform to the Egregorians, they come in any shape and size, any width and length, any degree of sense and Earthliness. They can be as terrifying and eldritch, or moreso, than one could possibly imagine, or simplistic and seemingly innocent. Egregorians have no true logical foundation or patterns to their being, they are the combinations of hundreds upon thousands upon millions or even billions of nightmares, all fused together, and thus they are quite possibly the most chaotic and difficult (quite likely even impossible) to understand life-forms within the entirety of known reality.
Egregorians can manifest anywhere and at any time, though they do not typically stay manifested for long, nor can they be truly captured on any known form of camera or camera-like device beyond a strange, jet-black, spiraling hair-like marking on the image taken.
Think of how nightmares work; they can be the most sensible, realistic dreams possible, or they can be the most surreal alien things imaginable, or they can be nothing out of the ordinary, but still inspire fear. Such is the nature of Egregorians, though exponentially magnified and combined with a thousand others of any ilk imaginable.