Billy and Marian are at the opening of the EMF fusion plant. Marian wonders why aren't the Shadow Warriors there, and Billy replies that, as the Code of the Dragon says, be careful with what you wish.
In other part of Metro City, the Shadow Dojo re-emerges. Abobo, Willy and the Shadow Boss (Jimmy Lee) enter and are greeted by the Shadow Master. Abobo and the Shadow Boss bow to the Shadow Master, but Willy, who doesn't know who he is, just tells him that he had a good idea by rebuilding the place. The Shadow Master gets bothered by Willy's voice and sends him to the Shadow Mural. When the Shadow Master explains that the mural is the fate for those who fail, Abobo understands that he's next and tries to escape, but is trapped anyways. Jimmy removes his Shadow Boss mask and awaits for his punishment. The Shadow Master tells Jimmy that since he raised him as his own son, he deserves more of his wrath, but he gives Jimmy another chance.
The Shadow Master intends to revert the EMF polarity to darken all light from the sky, and he doesn't want Billy to interfere, so he sends Jimmy after him and his Dragon Sword. To help Jimmy, the Shadow Master summons Jawbreaker, Sickle, Trigger Happy, Icepick and Countdown, and sends Sickle and Trigger Happy with Jimmy, claiming that they are better than his previous warriors. Jimmy leaves with them, and the Shadow Master goes to the EMF with Jawbreaker, Countdown and Icepick.
At the Dragon Dojo, Billy has just sent his young students home when Jimmy sneaks in and faces Billy. Billy tries to convince Jimmy to join the side of good with him, but Jimmy doesn't accept and attacks Billy. They fight unarmed until Jimmy unsheathes his Shadow Sword and shoots Billy, who then manages to kick the sword away. Sickle and Trigger Happy try to get the Dragon Sword from its rack, but it cannot be touched by evil, and generates a force field that repels Trigger Happy's shots. Michael returns to the dojo and Jimmy uses Billy's concern to Michael as a chance to retake his Shadow Sword. Billy reaches the Dragon Sword, and unsheathes it, and kicks Sickle away, then he swordfights Jimmy until Sickle uses Michael as a hostage to force Billy to surrender. Michael is freed and Billy, per his word, drops the Dragon Sword, but the Shadow Warriors still cannot touch it, so they destroy the Dragon Dojo with it inside, taking Billy as a prisoner. Michael calls Marian to tell her that Billy was captured, but she is busy facing the other Shadow Warriors who are attacking the EMF.
Billy is brought to the Shadow Dojo, where he meets the Shadow Master, who still considers the mission a failure since Jimmy didn't bring the Dragon Sword. As Jimmy takes Billy to the dungeons, the Shadow Master orders Sickle and Trigger Happy to kill both of them. Trigger Happy tries to shoot Jimmy, but Billy saves him, so Jimmy changes sides due to being betrayed. When they escape, Billy finds out that his brother also has the Mark of the Dragon on his chest.
Billy uses his Mark to locate the Dragon Sword at the ruins of the Dragon Dojo. The spirit of the Oldest Dragon appears and tells them to say "for might, for right, we are Double Dragons!" to transform into masked Dragon warriors. They see a dark whirlwind over the EMF, and go there in Billy's Dragon Cycle, that was saved from the Dojo destruction by being hidden under a trapdoor.
Billy and Jimmy go past Marian, defeat some Shadow Warriors and reach the EMF, where they face the Shadow Master, who orders Icepick to reverse the polarity. Icepick does so by flipping a switch, so Jimmy holds off the Shadow Master while Billy throws Icepick away and flips back the switch. The sudden return of the light weakens the Shadow Master and the Lee brothers blast him, so he falls down. Icepick jumps after the Shadow Master and both escape.
Marian thanks the brothers, whoever they are. They de-transform in front of her and Billy explains that Jimmy is one of the good guys now, to which Marian comments that she will have to deputize him too.