"Undefeated Bahamut Chronicle" is set in a world where the Arcadia Empire once ruled with the power of ancient mechanical weapons known as Drag-Rides. After the empire's collapse, the Drag-Rides became relics, and the world was reorganized into a new order. The story centers on Lux, a former prince of the old empire who now lives as a scavenger, stripped of his former status. Lux is skilled in piloting Drag-Rides, a rare ability in the current era, but he harbors guilt over his family's role in the empire's oppressive rule.

Lux is forcibly enrolled in the female-dominated academy, where students train to become Drag-Knights, pilots of the Drag-Rides. The academy is divided into factions, each vying for power and influence. Lux's enrollment draws attention due to his unique skills and his connection to the fallen empire. He becomes entangled in the academy's political struggles and is tasked with forming a team to participate in battles and tournaments. His team includes Lisesharte, a princess with a strong sense of justice; Philuffy, a carefree and powerful Drag-Knight; and Krulcifer, a mysterious and calculating student.

As Lux navigates the academy's challenges, he uncovers secrets about the Drag-Rides and the true nature of the Arcadia Empire's downfall. The story explores themes of redemption, loyalty, and the consequences of power. Lux's journey involves confronting his past, protecting his newfound allies, and challenging the remnants of the empire's legacy. The narrative blends action, political intrigue, and character development, with a focus on the relationships between Lux and his teammates as they face external threats and internal conflicts. The series culminates in a climactic battle that tests their resolve and reshapes the world's future.