"Chaos Dragon" is set in a war-torn world where nations vie for dominance, and ancient dragons hold immense power. The story centers on the island nation of Nil Kamui, which has been ravaged by a century-long conflict between the Kouran and D'natia Empires. The balance of power shifts when the Red Dragon, a god-like entity bound to protect Nil Kamui, is awakened. The dragon's awakening comes at a cost: it demands a sacrificial offering every six months to maintain its protection. This ritual, known as the "Red Dragon Contract," forces the people of Nil Kamui to make harrowing choices to ensure their survival.

The protagonist, Ibuki, is the last surviving member of the ruling Ryuuou family and the chosen "sacrificial prince" destined to be offered to the Red Dragon. However, Ibuki's fate becomes intertwined with a group of unlikely allies, including the mercenary Eiha, the assassin Swallow, and the warrior Lou. Together, they navigate the political intrigue and battlefield chaos surrounding Nil Kamui. The group's journey is further complicated by the presence of other dragons, such as the Black Dragon, which is bound to the Kouran Empire, and the White Dragon, allied with D'natia. These dragons symbolize the destructive forces of war and the moral dilemmas faced by those who wield their power.

As the story progresses, alliances shift, and the true nature of the Red Dragon's contract is revealed. The characters grapple with themes of sacrifice, loyalty, and the cost of survival in a world where power comes at a steep price. The narrative explores the consequences of war on both a personal and societal level, as well as the ethical complexities of using divine power to achieve peace. The series blends political intrigue, supernatural elements, and intense action, creating a layered story that examines the human condition amidst chaos and conflict.