Billy becomes the new Dragon Master of the Dragon Dojo and meets his twin brother, Jimmy. When Jimmy goes missing, Billy calls upon his Dragon birthmark to lead him to his brother. Billy then faces off against the Shadow Boss and discovers that he is none other than Jimmy.

The Shadow Master appears for the first time and orders Jimmy to retrieve his twin brother and the Dragon Sword. Jimmy kidnaps Billy, but fails to retrieve his sword. The Shadow Master then attempts to get rid of both the brothers, but the brothers escape and Jimmy changes sides, joining Billy. Billy and Jimmy become the Double Dragons and face off against the Shadow Master at the EMF plant.

Metro City passes a law banning hand weapons, and the Shadow Master takes advantage of the situation by illegally selling portable blasters. When a Junior Dragon's sister is injured in a drive-by shooting involving the illegally sold weapons, the Dragons work on shutting down the Shadow Master's weapon factory.

Ice Pick invents a new video game-like virtual reality system which allows him to blast people and objects in the real world. When he then manages to digitize the Double Dragons into the video game, a young, video game-obsessed boy named Danny must use his skills to help the Lee brothers escape from the virtual reality machine and retrieve the Dragon Claws.

As the Undertown mutants head above ground to be accepted as equals by Metro City, the Shadow Master hatches a plan to kidnap the police commissioner's daughter and blame it on the mutants. The Double Dragons must not only stop the escalating violence between Metro City and the Undertown mutants, but they must rescue the commissioner's daughter as well.

The Shadow Master begins manufacturing a steroid-like drug called RPM from his new underground factory. When he contaminates Billy with the drug, Jimmy and Daj must free Billy and help him break his addiction.