(Not a fic but rather an idea for the origins of the DreamSMP and it's characters. This will combine my own personal headcanons and information from the DreamSMP wiki as well as wikis for other important SMP's. This is not canon and rather my own interpretation. You can use this for your own fanworks with credit since I love seeing what other people create. A bit of a long read but hopefully you'll enjoy it!)

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Guess we'll start with one of the older members. Philza 'Phil' Watson is assumed to be human (but some of the society's members remember seeing a soul creature some long time ago that looks strikingly similar.) He has two biological children, William Gold Watson and Thomas Innit Watson as well as an adopted son Techno Blades Watson. Techno's exact age isn't known and his early life was filled with disdain and hatred. Orphans turned government assassins killed his parents for being pig hybrids which sparked his vendetta against both government bodies/systems and orphans, though this orphan one has since died down in recent days. Taking on the name Technoblade he trained to defeat the orphans despite being much younger than them, he learned of his inner strengths in combat. But before he could go fight them, he was welcomed into the home of a single father and two young sons. Will was treated as the oldest son and he had a gift for musical talent while Tommy had an aptitude for making people laugh and playing video games. The four lived in general solitude for a while, only coming across a young Toby 'Tubbo' Smith who became best friends with Tommy and was offered refuge at their house whenever needed. But as the three reached their young to mid-teen years, the law caught up to Phil who had been illegally protecting a hybrid. Techno's combat skills allowed him to escape unscathed and he gave chase for one of the few places where hybrids weren't wanted dead; Hypixel. Tommy and Will couldn't keep up with Techno and ended up settling in the forest. However, Phil ended up getting arrested, sentenced to life in solitude hardcore. Phil had the upper hand though, knowing something many didn't. If you stay alive in a hardcore land for over 5 years, it's hardcore "properties" wear thin. (Basically stay alive for a long time and if you die, you'll just spawn in a different server) So for the next five years, Phil is basically in limbo lol.

Techno managed to make it to Hypixel. Shoving down many of his emotions so he didn't have to worry about his brothers and his father (using even extreme methods of experimentation to force himself to be only apathetic), his hate for the government continued to stir as he built himself a reputation. Learning a bit of his Greek heritage, he took on the name The Blood God as a result. But with his new power came people who wanted him dead no matter what. As such, Simon Hypixel took him under his wing as a means to protect someone he believes he could use as a weapon. Techno even took up potato farming when he became too good at combat in which he met someone he still saw to this day as his mentee, Squid Kid.

Will stayed with Tommy for a few weeks but without his dad's grounding presence he started going a bit crazy. In order to avoid Tommy becoming like him, he escaped while he was asleep and joined a group of travelers called the Soot House. Dropping his old name, he went by Wilbur Soot from then onwards. But with every passing day, he felt colder and colder and his attention was drawn to a celebrity by the name Jack Massey Welch. Abandoning Soot House, he desperately tried to become his editor in a mix of longing for someone to care for him and signs of insanity. About a year passes like this but instead of becoming his editor, he is welcomed into Jack's little family of himself and Kai Ross-Best. Kai however after a little while is proven to be a strange anomaly feeding off of Wilbur's insecurities to make him and others freeze to death and in a fit of anger, Wilbur leaves Jack and spends the last few months before SMPLive writing music and playing it for anyone who'd listen. His first full album, Your City Gave Me Asthma, was written during this time.

SMPLive was another safe haven server where humans and hybrids and other species could co-exist with each other. Founded by Carson King and a fish hybrid Cooper Schulz, Wilbur met one of his close friends Johnathan J. Schlatt on there. He is a ram hybrid who is a bit of a scammer and never been the most morally correct but is seen by many as funny. Schlatt was seen as an innovator in human/hybrid relations. Creating the first business ran by both hybrids (himself) and humans (Connor), he was a member of a podcast group that had both species as well (Carson, Charlie, Noah, and Ted then Schlatt, Cooper, and Travis) Tommy looked up to him as an idol. Speaking of which...

Tommy after Phil's capture and Wilbur's disappearance was alone for a bit until meeting up with Tubbo once more. The two moved to Hypixel as commoners but as Tommy began proving himself in combat, he began catching the attention of people like Bitzel, Luke, and even Deo. They along with Tubbo became like a family. It took a long time but Tommy managed to be noticed by Techno after getting ranked by Simon Hypixel. Techno at this point has conditioned himself to be the numb, cold Blood God we all know and treated Tommy almost identically to how he does everyone else leaving him emotionally confused but he kept pushing through to get into his older brother's good graces once more. He joined his other brothers SMPLive like server called SMPEarth later on along with Techno, Tubbo, and others. But before we get into the other two major SMP's we gotta look at some other events happening around the time of SMPEarth.

So some few hundred years ago an ancient civilization was formed on the other side of a mountain. Its ruler was originally kind, defending against a tyrant who wanted to take siege to their land but even after defeating the said tyrant, the ruler began to become corrupt. But no one knew how such a change could happen overnight. A young boy of the village discovered that it could be the act of a sub-species of demons who prey on powerful people's weaknesses in their dreams. Those who have had previous contact with these demons are more likely to be weaker to them unless they have taken the needed precautions. But before the boy could save his ruler, the ruler was executed and the town was eradicated by a chaotic man. The boy was killed in the crossfire and never got his chance to cleanse the demons. In a journal, he had dubbed them "Dreamons". The chaotic man who killed the town and one boy named Kisuke Urahara are the only ones to have survived and no one knows where they have been since.

Fast forward to the present day and a man named Clay (under an alias Dream) who has been battling with a Dreamon for control of his body moved into a patch of land not too far from the old village. Alongside him, he moved in with his two best friends George and Sapnap (Two humans), as well as Callahan, Alyssa, Ponk, and a creeper hybrid named Sam. Also with them is BadBoyHalo, a protector angel who is disguised as a human to exterminate any potential demons which may at some point include Dream. They live here in peace for a while, playing a game called Manhunt which Dream excelled at. During this time, Eret, Purpled, Quackity, Jack Manifold, and Connor sometimes hung out on SMPEarth. Sometime around now, Fundy was also born and raised by Wilbur in secret. He told him stories about a theoretical mother named Sally the Salmon in order to give him the illusion of normalcy but he was actually the son of a fox hybrid tribe that was brutally slaughtered by a team of assassins. Fundy was the sole survivor. Also during the time of SMPEarth, Karl Jacobs was welcomed into the Beast Complex; a place ran by a sub-species of hybrid that can simply transform from human to tiger when he pleases named Jimmy Donaldson. 

The Beast Complex was created to save as many humans, hybrids, and other species as he can using his wealth as a weapon for good. Going under the name MrBeast, he can simply bribe many assassin groups out to kill non-humans and get them arrested with ease. Basically; Jimmy is cool and suave and unintentionally can make most anyone do almost anything but he's also got childhood trauma from being a hybrid cuz like who's a YouTuber without some good old-fashioned PTSD? Karl is one of these agents, given money and sent out to help as many people as he can. Jimmy has become close friends with Techno, Dream, and Quackity during his time as MrBeast, the latter of which being a major help for working through his PTSD. Jimmy also found a surrogate father figure in Felix Kjellberg.

Now back to SMPEarth. There Tommy finally met up with his whole family once more. As the server began, Phil finally managed to escape the Hardcore world, and Wilbur's friend Josh made sure the server was under constant protection from those who might want him dead. But Phil's memory was very sporadic, remembering little from his past. He took an instant liking to Techno and joined him in creating the Antarctic Empire. The two acted more as equals than father and son. He enjoyed Wilbur's company as well but only saw Tommy as an annoying child for quite a bit but came around after some time. With Techno apathetic, Phil's memory gone, and Wilbur being generally distant and a bit crazy, Tommy felt he had to rebuild his family all by himself. He also experienced his first of many betrayals from Wisp here. SMPEarth came to a close and Phil was taken to a special treatment center that uses meditation and warrior training to open the third eye and bring back memories. Techno returned to Hypixel, Tommy went to the DreamSMP after being invited by his new friend Dream along with Tubbo and Wilbur relaxed in the ruins of his SMP with his son for a bit until he logged on with Schlatt.

The DreamSMP plays out generally the same with some differences that will be listed here. Tommy and Tubbo came as a duo and after a falling out with his father, Fundy escaped to the DreamSMP where Tommy and Tubbo found out that Wilbur had a son. Wilbur logged on to take Fundy home along with Schlatt but he decided to stay. Schlatt was going to stay in the SMP as well but got banned since Dream didn't know who he was and sensed he had an evil aura Dreamon's could exploit. Wilbur was allowed to stay however and decided to make up for lost time with Tommy, wanting to create a drug business with him. Dream knew of the story of the ancient village and tried to shut down the business leading to Wilbur and Tommy creating their own separate nation. With Fundy and Tubbo joining in, Dream was running out of options and decided to do a war to stop them from repeating history. However, Dream only knew of "demons corrupting a leader" and didn't know he was causing some of the problems himself. As his Dreamon tried to take over, they made him hungry for blood in the war. In another last-ditch effort to break L'Manberg's spirits, he sends in his good friend Eret to betray them. It backfires, however, leaving Tommy more traumatized but determined to defeat Dream which they did. Dream wanted to tell them to stop making the nation so none of his friends would be corrupted but he'd have to reveal his status as part Dreamon in which Bad would have to either execute or imprison him. The Dreamons that haunted L'Manberg territory began tearing away at Wilbur's self-confidence and kindness. This made Wilbur much brasher in the elections. 

Schlatt won but Dreamons still clung onto Wilbur, bringing out the insanity that Kai Ross-Best ignited. Meanwhile, in the new Manberg, Schlatt's originally sarcastic but light-hearted nature was replaced with one of spite; an evil man spiraling into alcoholism and depression to cope with the newfound demons sucking at his life force. Quackity, Tubbo, and George were also at risk for this. At the last bits of humanity disappeared from Schlatt, he made some plans. At the festival, he outed Tubbo as a "traitor" (which he was right about) in order to save him but from that point onwards, Dreamon's took over and he ordered Techno to kill the boy. The Dreamon's unintentionally did the work for him in getting rid of Quackity with from help of Jimmy told Schlatt off and escaped from his grasp. As for George, the day after Schlatt was elected, Dream ordered George to leave and not associate with Manberg at all costs to avoid any corruption. Tubbo and Fundy also began trying to get rid of Dreamons after finding the journal of the village boy but barely anyone took them seriously and they had bigger fish to fry. In the final battle, they kill Schlatt once and for all. Tubbo takes over as president despite his own fears and knowledge of Dreamons. 

On the day of the war, Phil's memory finally is fully intact, and learning that his son was once president of 'that land', he stormed back to help him but finds that he's about to blow up L'Manberg. When Wilbur begs him to kill him, he complies thinking it would set him free from the Dreamons and he could get his sons out of here but after finding out it was his last life, he feels immense guilt. At this point, Phil supports Techno's anarchy but is trying to control it to avoid a complete rehash of the last civilization. On top of that, Phil tries to protect Tommy and Tubbo from being corrupted by acting more fatherly than ever. But with every passing day, Tubbo feels himself becoming more cold and more distant...

Here's everyone's current status on the server as it aligns with the origins;

Dream: Still battling the Dreamons begging for complete control of him. He wants his friends to be safe but the only reason he won't tell them the truth is so that he isn't imprisoned or killed for something out of his power. Has all 3 lives left

George: Still kept hidden away from power by Dream so he can't be corrupted. George is starting to get suspicious of Dream. What is he hiding from him? Has 2 lives left

Sapnap: Just kind of vibing right now. Has been known to hunt Dreamons. 2 lives left

Callahan: Vibing, 2 lives left.

Sam: Vibing, 3 lives left

Alyssa: Vibing, 3 lives left

Ponk: Has been possessed by Dreamons before and is doing research on their origins, with 1 life left.

BadBoyHalo: Knows of the servers Dreamons but doesn't believe they are at large like regular demons could possibly be, 2 lives left.

Tommy: Might be a target of Dreamons, mourning the death of his brother and is betrayed by Techno. Phil is looking after him, 1 life left.

Tubbo: Doing research on Dreamons normally but forced to abandon it to run his country, 2 lives left (but maybe 1 if the final control room was permadeath for him.)

Fundy: Doing research on Dreamons and rebuilding L'Manberg. Helping his father get his memories back, 2 lives left

Punz: Vibing, 3 lives left

Purpled: Vibing, 3 lives left

Wilbur: Dead, wandering as a ghost with little memories

Schlatt: Dead, wandering as a ghost with little memories

Skeppy: Might be sent as an agent to help Bad solve the mystery of what he dubbed "The President's Curse", 2 lives left.

Eret: Vibing, for the most part, 2 lives left

Jack Manifold: Vibing, 3 lives left

Niki: Vibing, 2 lives left

Quackity: Vibing, 2 lives left

Karl: Vibing, 3 lives left

HBomb: Vibing, 3 lives left

Technoblade: Anarchist, 3 lives left 

Antfrost: Vibing, 3 lives left

Phil: Out to keep Tommy and Tubbo alive, defeat the Dreamons without causing much concern for the others, and avoid Techno from killing everyone, 3 lives left

Connor: Vibing, 3 lives left

Puffy: Vibing, 3 lives left

Life amounts of other slightly important characters:

Jimmy Donaldson: Assumed to be 3 by many but actually at 1

Ninja: 2

Drista: 3, might be a target for Dreamons.