Reiji Oozora is a total loser! Not good at anything especially schoolwork! One day his friend Maiko Yukino offers to share her class notes with him to help him out on the condition that he takes her wherever she wants to go. She takes him to a secret place where a virtual reality game called Dragon Drive is played. Reiji signs up, gets his own dragon, which ends up being the smallest and weakest in the game! Because of its tiny size Reiji names the dragon Chibi.
Right after joining the game Reiji and Maiko are sent to battle a classmate who has as crush on Maiko named Daisuke. Reiji runs from the battle and just when it seems like he can't win his dragon does something impossible! It suddenly powers up and defeats the much larger dragon. Reiji wins and is suddenly addicted to this new exciting game.
A staff member of the Dragon Drive virtual reality game named Agent L realizes that there is something incredible about Chibi's performance and invites Reiji and Maiko to a special training room. There she reveals the real purpose of the game is for players to bring out their dragons' true potential. Just then a strange girl riding a dragon appears and takes them to a fantastic magical world. It turns out it this world is in peril of being taken over by an evil group called RI-ON and the only thing that can possibly stop them in none other than Reiji's little dragon! Thus the adventure begins!