Dragon Knight 4 is a sequel to Knights of Xentar (Dragon Knight III). Years have passed after Takeru (a.k.a. Desmond, the hero of the previous Dragon Knight games) defeated the ultimate evil. He married his sweetheart Luna, and they had a son named Kakeru. This fifteen-year-old boy has one weakness: he likes naked female elves. But soon he learns that the evil wizard Lushifon wants to turn all people into stones and control the whole world while nobody is able to stop him. Together with the mysterious swordsman Eto and many other heroes, Kakeru must perform his ultimate quest and defeat Lushifon and his minions.

The adult content (scenes which include nudity) has been removed from the console releases. The PlayStation version has updated graphics and CG animations.

Set 15 years after Dragon Knight 3 our hero Takeru along with Luna has finally settled down. All is at peace untill mysterious force from another time invades Takeru's world. And so, request for his help along with his allies has been sent. Takeru thinking it a good opportunity decides to send his son Kakeru on this adventure instead of himself. In retaliation for Takeru's decision, his old comrade Baan sends along his own son Sail to accompany Kakeru. With the torch passed from father to son will Kakeru and Sail make their fathers proud?