Billy and Jimmy Lee return to their childhood city after receiving a letter from their master. The city has changed drastically in the ten years since the brothers left, becoming a haven for street gangs known as Bloody Town after it has fallen under the control of the crime boss Koga Shuko. Shuko is hosting a martial arts tournament in order to recruit new members into his organization, but also to lure the Lee brothers in bringing him one half of the titular Double Dragon medallion. Shuko is in possession of the other half. Whoever possesses both halves of the Double Dragon medallion will acquire unlimited powers. The character roster includes ten immediately playable fighters and two boss characters. Billy and Jimmy Lee both fight using the fictional Sou-Setsu-Ken martial arts style, with Billy having the faster techniques, while Jimmy is stronger. The twin brothers also have the ability to transform into an alternate form as a super move, altering their move lists. The other eight fighters are Marian, a female gang leader and childhood friend of the Lee brothers; Abobo, a strongman employed by Shuko; Burnov, a former wrestler with a rivalry against Abobo; Eddie, a kickboxer; Amon, a ninja; Cheng-Fu, a master of the drunken fist; Dulton, a street fighter; and Rebecca, a master of the dual tonfa. The characters and settings are inspired by the Double Dragon film, which features prominently in the game's intro. This includes the appearances of a submerged Hollywood Sign, the appearance of the Dragon Wagon in Billy's stage, the Lee brothers' transformation technique, Marian's depiction as a gang leader, and the inclusion of Koga Shuko as the game's final opponent. However, the characters are depicted in a more anime-like style and only five of the game's twelve fighters are actually featured in the movie; Burnov and Duke are from previous Double Dragon games and the rest are new characters created specifically for this game.