"Onimusha: Dawn of Dreams" is set in a war-torn feudal Japan, where the land is plagued by demonic forces unleashed by the malevolent warlord Hideyoshi Toyotomi. The story unfolds as Hideyoshi, once a unifying leader, becomes corrupted by the power of the Genma, a race of demons seeking to dominate humanity. The Genma's influence spreads chaos, and their leader, Fortinbras, orchestrates a plan to merge the human and demon realms, threatening the balance of existence.

The protagonist, Soki, is a young warrior who wields the Oni Gauntlet, a mystical artifact that grants him the power to combat the Genma. Soki is revealed to be the reincarnation of the legendary hero Samanosuke Akechi, who previously defeated the Genma threat. Alongside Soki, a diverse group of allies joins the fight, each with their own motivations and abilities. These include Jubei Yagyu, a skilled swordsman seeking redemption; Ohatsu, a shrine maiden with spiritual powers; Roberto Frois, a European monk with a tragic past; and Tenkai, a mysterious monk with ties to the Genma.

The narrative follows the group as they travel across Japan, battling Genma forces and uncovering the truth behind Hideyoshi's corruption. Their journey reveals the intricate connections between the characters and the Genma, as well as the deeper history of the Oni Gauntlet and its role in the conflict. The group faces numerous challenges, including internal conflicts, betrayals, and the growing threat of Fortinbras, who seeks to use Hideyoshi as a vessel to achieve his goals.

As the story progresses, the characters confront their own personal demons and past traumas, which shape their resolve and unity. The climax centers on a final confrontation with Fortinbras and the Genma, where the fate of both the human and demon realms hangs in the balance. The resolution ties together the themes of sacrifice, redemption, and the enduring struggle between light and darkness, leaving a lasting impact on the world and its inhabitants.