The year is 1942. The place is somewhere in North Africa. The problem: the Nazis found a dragon's egg some time before World War II began, hatched it, and set about breeding more. These dragons reproduce parthenogenically, meaning that one dragon can reproduce herself many times, as can each of her "daughters."
The film takes place in the forest of Sidhe, following Princess Alora on her journey to Bagnor Brim to seek the aid of Lord Blackthorne against the dark elves waging war on humanity throughout the realm. Attacked by dark elves, the Princess is saved by the warriors Lord Artemir and Cador Bain. The two warriors insist that they accompany Princess Alora on her quest to act as her guardians and warn her of the dragon which dwells within the forest.
A group of fugitive Knights Templar attacks a pirate ship and they are cursed to turn into hideous monsters. To fight the curse and ultimately save the world, they must defeat the Sorcerer (The Black Dragon) who is determined to destroy it.