The movie takes place fifty years before the game. Alteria is a land divided among humans, elves, goblinoids (called "beasts"), and dragons. Decades ago, the elves and humans drove the beasts and dragons back into the Dark Mountains. However, with the beasts vanquished, the humans and elves eventually came into conflict with each other, thereby remaining unaware that evil begins to thrive and gain strength again within the Dark Mountains, all centered on a gem of power embedded in the chest of the sleeping Black Dragon Karas, under whose influence the beasts have united into an army.