I found this battle really tough, mostly because I thought you couldn't sleep again after it so I was conserving spells - no heal, no mass heal, no chain lightning, no nothing
. Good news is, it's possible to do without magic at all, though it took me a few tries.
I had my tanks (3) target the captain first, then the slayer knights. Leave the dragons till the end, they do nothing. I did cast improved haste before we went, and moved all my weak people (wizard, cleric, rogue) over to the right. One of them hung about a bit to lure one of the slayer knights over towards her, which she then proceeded to lead about the place not letting him get close enough to attack. When the other knights were dead, my tanks took over. If you throw in some chain lightnings and have some heal and a mass heal or two to play with you should be okay. Just make sure you go for the knights/captain first; they do a lot of damage.