Plot
In 984 A.D., the knight Sir Bowen mentors Saxon Prince Einon in the Old Code, hoping that the boy will grow up as chivalrous, intelligent, and just ruler. While suppressing a peasant rebellion, Einon's father, King Freyne, is killed by the rebels, and peasant girl Kara accidentally wounds Einon's heart. Einon's Celtic mother, Queen Aislinn, asks a dragon to save his life. The dragon makes Einon swear to be a just ruler and replaces Einon's wounded heart with half of his own. Einon, however, proves to be even more cruel than his tyrannical father, enslaving the former rebels that killed Freyne and forcing them to rebuild a castle. Einon also has Kara's father, who led the insurgents, blinded. Believing that the dragon's heart has corrupted Einon, Bowen swears vengeance on him, and all dragons, by hunting them down.
Twelve years later, Bowen has become a skilled dragonslayer, but has lost his faith in moral and chivalric principles as he has hunted dragons nearly to extinction. Monk Brother Gilbert witnesses Bowen's prowess and follows him to record his exploits. Meanwhile, Kara asks Einon to free her father after years of slavery; Einon accepts, and kills him in order to "free" him.
Bowen stalks a dragon to its cave, not knowing that it is the one who saved Einon. The confrontation ends in a stalemate, during which the dragon states that he is the last of his kind; they agree not to kill each other and instead form a partnership to defraud villagers with staged dragon "slayings". Bowen later names the dragon after the Draco constellation, unaware of Draco and Einon's connection, through which they feel each other's pain.
Kara, seeking revenge on Einon, is imprisoned after a failed assassination attempt. Recognizing her as the girl he saw while dying, Einon tries seducing Kara and making her his queen. Despising what Einon has become, Aislinn helps Kara escape the castle. Kara tries to rally her village against Einon, but they sacrifice her to Draco instead. After Draco takes Kara to his lair, Einon arrives to recapture her and fights Bowen. During the confrontation, Einon reveals his contempt for Bowen and his beliefs, forcing Bowen to accept that Einon was always evil, even before he received the dragon's heart. He nearly kills Bowen, but Draco intervenes and reveals his half-heart to Einon, making him flee in fear. Kara asks Bowen to help overthrow Einon, but the disillusioned knight refuses.
Bowen reunites with Gilbert at another village while Kara tries exposing Bowen and Draco, appalled by their actions. The villagers do not believe her until after the staged slaying while Draco plays dead. He bolts when the villagers decide to carve him up for meat, revealing the scam. They then surround Bowen, Kara, and Gilbert, wanting to eat them instead; Draco rescues the trio and takes them to Avalon, where they take shelter among the tombs of King Arthur and the Knights of the Round Table.
Draco reveals that he hoped to change Einon's nature by saving him, reuniting the races of Man and Dragon, and earning a place in the constellation—the Dragon's Heaven. Draco fears that his choice has cost him his soul, and that his spirit is doomed to disappear upon death like he never existed. After hearing that Kara and even Gilbert intend to oppose Einon, Draco agrees to help. When a vision of Arthur reminds him of his knightly honor, Bowen also agrees.
Bowen, Kara, Gilbert, and Draco organize and train the villagers into an army. They are nearly victorious against Einon's forces when Gilbert strikes Einon in the heart with an arrow, but Draco, feeling Einon's pain, falls from the sky and is captured. Realizing that he is immortal as long as Draco lives, Einon is determined to keep Draco imprisoned. Knowing their connection, Aislinn attempts to kill Draco at his request, but Einon intercepts and kills her.
The rebels invade Einon's castle to save Draco. Bowen throws Einon from atop a tower in the ensuing fight. He then tries freeing Draco, who begs Bowen to kill him and end Einon's reign. Einon rises and charges towards them, forcing a reluctant Bowen to throw an axe into Draco's exposed half-heart, killing him and Einon.
Draco's body dissipates as his soul joins his fellow dragons to become a new star in the constellation. Bowen and Kara go on to lead the kingdom into an era of justice and peace, with Draco's star shining brighter than ever in troubled times.