When the Shadow Master begins enslaving an underground city of mutants in his factory, the Double Dragons decide to rescue the workers with the help of a mutant named Daj.

Dr. Linquist discovers an ancient Dragon Sword inhabited by a spirit known as Dao Lung. When the Shadow Master blasts the sword, deforming it, Vortex attaches it to the Dragon Copter, inadvertently allowing Dao Lung to act as an auto pilot. Dao Lung then helps the Dragons defeat the Shadow Warriors.

The Shadow Master revives an ancient beast known as the Shadowmonster, which centuries ago defeated Dao Lung's master, Chen Long. To his surprise, Dao Lung then discovers his master sleeping in a cave, alive and well. The Dragon Masters then awaken the ancient Dragon Warrior to help fight against the Shadowmonster once more.