Based on the board game of same title.
Hank, Presto, Eric, Diana, Sheila, and her younger brother Bobby all go to an amusement park one night. While there, they go on a ride called 'Dungeons and Dragons.' But while on that ride, they get sucked into the world of Dungeons and Dragons. There they are attacked by various monsters and entities. When all seems lost, they're greeted by a short, mysterious man known as Dungeon Master. He gives each one of them a magical item that they can use to fight monsters and defend themselves.
Hank (the Ranger) is given a bow that creates arrows of energy. Presto (the Magician) is given a hat of magic spells. Eric (the Cavalier) is given a shield that can deflect any attack against it. Diana (the Acrobat) is given a extendable javelin that allows her to do feats of acrobatics. Sheila (the Thief) is given a cloak that when the hood is pulled up, makes her invisible. And Bobby (the Barbarian) is given a club that can crush anything it is struck against.
They're all being pursued by the evil Venger, a man who's history is somehow tied with the Dungeon Master. His ultimate goal is to acquire all six magical items the kids possess. He has a sub-servant known as the shadow demon who spies on the kids and gives reports on their goings-on. Venger has a mortal enemy, a five-headed dragon named Tiamat. The kids are constantly looking for a way back to their home, but also go where the Dungeon Master tells them their presence is required.
Dungeon Master sends the children northward to the town of Helix to attend a local dragon-banishment celebration. On the way they meet Merlin in his magnificent sky castle. The wizard offers to make Presto his apprentice, only if the young mage chooses to leave his friends and stay there for the rest of his life. But is Merlin's once-in-a-lifetime offer all that it appears?
The children come across a knight named Sir John, who helps save them when they are being chased by a giant scorpion. When Dungeon Master sends them to battle a beholder in a distant valley, the children decide the knight is the perfect person to accompany them. The only problem is Sir John, in reality, is an utter coward.
The magical weapons the children use run out of power on them. Dungeon Master tells them they can recharge the weapons at the Hall of Bones. Venger learns of the children's difficulties and decides to intervene to see to his own interests.
The kids come to the aid of a unicorn named Silvermane, the leader of the last unicorn herd, who under attack by wolves. But when their attention is diverted, an old wizard named Kelek kidnaps Uni. The kids seek out the evil man, who is trying to steal all the horns from unicorns to harness the teleportation powers they possess. But they find themselves too late to save Uni, who is now weak and hornless. The kids free all the de-horned unicorns and ask to be taken to the Valley of the Unicorns so they can protect the remaining three from the Kelek. But little do they know that they are leading someone else into the valley with them.
While taking a lesuirely ride through the forest, Dungeon Master is attacked by a Warduke, a bounty hunter who possesses a sword that covers that which it is struck against with ice. He strikes the side of the tree Dungeon Master is perched on, trapping Dungeon Master in a block of ice. When the kids are made aware of Dungeon Master's capture, they set out to rescue him before Venger can claim him first.
The kids must seek out the river that rains upside down. Once a year the river reverses it's course and rains upwards for 60 seconds. And those who are in it can go whereever they desire. Dungeon Master warns the kids that they 'must never touch the beauty that brings the beast,' but Eric picks a flower later in their quest that turns him into a bogbeast. He then finds out that if he cannot undo the spell, he'll be stuck that way forever. So the kids are now stuck in a dilemma, find their way home, or find a cure for Eric.
The kids are sent to a valley where a village of gnomes reside. However, the gnomes are enslaved by Venger to mine the mystic gems out of the walls of the valley. When the kids attempt to free the people, they are informed that the residents cannot be free until Lukion, the gnome spellbinder, lifts the spell upon the valley. The kids then set out for the Swamp of Sorrow to find Lukion, and free the prisoner trapped in a prison without walls.
It's Bobby's birthday, but Venger's lizardmen crash his party and kidnap his companions. Now, aided only by Uni and Dungeon Master's magical amulet, Bobby must befriend the reluctant giant Karox and free his friends from Venger's Prison of Agony.
Venger's enslaved skeleton warrior, Dekion, reports that he has found the Circle of Power, but it is held in the Lost Tower of the Celestial Knights. Only those with the pure of heart and could be a celestial knight themselves could enter the tower and survive it's test of courage. Even though Dekion was once a celestial knight, because he is under Venger's power, he cannot enter. But Venger has a few tricks up his sleeve. Meanwhile, the kids are told to go to the Lost Tower of the Celestial Knights in order to find their new way of getting home. When they meet Dekion they are cautious, but when he informs them that he is a victom of an evil wizards spell they agree to help him. But once inside the tower, the kids start seeing illusions that test their courage, and they all start to fall victom to their fears.
The kids are starving, and unable to catch any food. Even fishing results in catching a hydra, prompting the kids to defend themselves. But Bobby is poisoned by it's bite and the kids seek Dungeon Master's aid. Alas, they require a natural treatment: The Foot of a Yellow Dragon. One can be found North in the Garden of Queen Zinn. Along the way, they meet a strange creature named Solars, who allows the group to leave the ailing Bobby with him so they don't risk further injury. But the group is in for a surprise when they meet the servant of Queen Zinn and his trickery.
A sudden earthquake splits the ground the kids walk on and Hank falls in. When the kids come to his aid, they find a box. The Dungeon Master informs them that it is Zandora's Box, a magical device that contains good or bad things, depending on where it is opened. He also informs them that the box is the key to them getting home. They must first free Zandora, who can be released from her current place of captivity by placing the box in the shadow of the skull on Skull Mountain at exactly noon. Once free, Zandora can tell the kids where to place the box to allow them to return home. But when Venger becomes wise to their plans, he isn't going to let them succeed in any of their plans.
While searching for a mysterious ship that will take them home, the kids team up with another gang of lost children to save their elder, Alfour, held prisoner in Venger's castle along with the ship.
Presto bungles yet another spell, and he and Uni must face enormous danger to rescue both their friends and the last of the Golden Dragons from the infamous Brooklyn Giant and his slimey pet Willy.