A boy named Shu is obsessed with knight masters learns that one has appeared in his village. Shu gets excited at this possibility and goes in search of him. His village gets attacked after finding the "knight master". Shu unleashes his true power after finding his friends are in trouble.

Arriving at the Blue Dragon's ruins, Shu and Blue Dragon have a confrontation with a shadow called Dark Dragon. After nearly falling for Dark Dragon's deceit, Shu and Blue Dragon engage it in battle matching attack with attack. Shu manages to overcome Dark Dragon.

Zola has been defeated while Marumaro and Saber Tiger free Kluke, Phoenix, Bouquet, and Hippopotamus. Shu and Jiro have Blue Dragon and Minotaur attack Nene. Nene combines the Chimera clones to form one large Chimera. Meanwhile, General Logi has dispatched his troops which will attack when Schneider and Andropov receive the command from General Logi. Nene uses Chimera's Dark Symphony attack which weakens his opponents. When Shu and Blue Dragon's attacks are countered by Chimera's attack, Shu falls unconscious. In a dream sequence, he encounters Lt. Dragnov and Homeron. Marumaro and Kluke are defeated as Jiro has Minotaur aim for the device on Chimera's forehead. Shu rises from his boulder grave for another bout with Nene. Assisting Jiro and Minotaur in attacking the crystal on Chimera's forehead, Shu and Blue Dragon learn that the crystal enabled Chimera to alter his elements. The limiter is unleashed as Nene and Deathroy merge with Chimera to form an amalgam of all three of them. With Jiro defeated, Shu uses every ounce of his power and manages to destroy Nene as Deathroy is shown lying on the ground. With news of Nene's defeat, General Logi gives the command and has Schneider take over Castle Des La Teste while Andropov attacks some Gran Kingdom airships. This is General Logi's act of his secession from Gran Kingdom which he announces.

Two years after the world is freed from darkness, a young dragon escapes and crashes to earth. Shu and Bouquet have joined Legolas' Sarbin resistance against General Logi. Shu leads a supply raid on a Rosekstan airship, then rides with Bouquet to investigate the crater, and encounter a mysterious boy named Noi. All three find themselves prey to a Rosekstan fleet. But a red dragon appears and decimates the Rosekstan forces. While evading the red dragon, Noi uses his Tosen Kyuden ability on Shu. With Noi's help, the Blue Dragon returns. After a fierce battle, Shu and Blue Dragon cause the red dragon to retreat.