She is a Dream Spirit, she herds the dreams that float through the air to make sure that each dream gets to the right dreamer. Not just for humans, either. Animals and, who knows, maybe even plants dream, and she has to make sure that dreams do not go astray.
I made her using one my favourite yarns, an alpaca mix. She's a simple shape (using the same basic pattern as my Rock Spirit) that I enjoyed embellishing with various scraps of fuzzy yarns to make her 'whiskers' and then I gave her curved horns/ears. I got a kind of witchy/shaman vibe from her when she was finished and then I could see what she was.
Here's her relative, the Rock Spirit: