The Dragon Master, Darklarza, has been terrorizing the kingdom for many years. The king was forced into exile by this threat. He retreated, with the bravest knight in the kingdom, named Garaden. Darklarza stages an attack on the king's fortress, breaks in and manages to abduct the royal princess. Garaden sets off to vanquish Darklarza and rescue the princess.

Dragon Knight marked the beginning of Elf's erotic RPG series. The game is played entirely from a first-person perspective. In the town, you move around by selecting destinations from a menu. Once you enter the tower, you navigate your character through 3D mazes, fighting random enemies in turn-based combat. Enemies in the game are scantily clad, attractive young women; there are also several scenes with explicit nudity.