"The Shadow Falls" is the first episode of the animated series. The title is also the battlecry of the Shadow Warriors in the series.
18 years ago, John Lee arrives to the Dragon Dojo and leaves his son Billy, who bears the Mark of the Dragon, under the care of the Oldest Dragon. Then John leaves to find his other son, who has been taken by the Shadow Warriors.
In present day, Abobo and Willy are robbing an armored car. Michael sees this and heads to the Dragon Dojo, where Billy Lee is practising his martial arts. Michael asks Billy to help against the Shadow Warriors, but Billy is reluctant until the Oldest Dragon convinces him otherwise. The Oldest Dragon gives Billy the Dragon Sword, and Billy heads to the place of the robbery.
When Billy arrives, he helps police officer Marian Martin against some Shadow henchmen, but Abobo and Willy escape with the cash. Marian isn't happy with this, but Billy is, because at least nobody got hurt. Marian realizes that Billy is a Dragon Master and Billy leaves. When he returns to the Dragon Dojo, Billy finds out that the Oldest Dragon is gone (it's implied that he passed out). Marian arrives to the Dojo and tells Billy that she was authorized to make him a special deputy.
Abobo and Willy return to the Shadow Dojo, where the Shadow Boss is unhappy because, despite getting the catch, they lost several warriors. The Shadow Boss sends Abobo and Willy to commit other robbery, but they are thwarted by Billy and Marian again. Abobo and Willy escape, and the Shadow Boss sees footage of Billy in the camera from one of the Shadow Warriors' helmets, which gives him a plan.
Billy, Marian and Michael are at the Dragon Dojo, where suddenly arrives Jimmy Lee, Billy's long-lost brother. They are attacked by the Shadow Warriors, but the Dojo security system makes them run away. Jimmy explains that the Shadow Warriors kidnapped him as a baby, but now he escaped.
Jimmy suggests Billy to enter a tournament to spread the name of the Dragon Dojo and teach martial arts to street kids. While Billy is fighting in a match, Marian is called for duty and Jimmy accompanies her, but the radio call turns out to be a trap by Abobo and Willy, who capture them.
When Billy finds out about the kidnapping, he conjures the Mark of the Dragon from his chest to guide him where his brother is. Billy arrives to the Shadow Dojo and faces the Shadow Boss' shadow, who tells him that what you see is what you get. When Billy doesn't find a door, he remembers these words and closes his eyes, which allows him to go through the front wall.
Inside the Shadow Dojo, Billy faces Abobo and Willy, then finds Marian chained and releases her. Billy goes after Jimmy but finds the Shadow Boss instead. They fight and Billy loses his sword, but Marian throws it back to him. The opossing blasts between the Dragon Sword and the Shadow Boss' sword make the Shadow Boss fall defeated, but then Billy finds out that the Shadow Boss is his brother Jimmy.
Jimmy escapes, and Billy tries to destroy the Black Flame that the Shadow Warriors worship with a blast of the Dragon Sword. When he does it, the Shadow Dojo collapses, but Billy and Marian manage to get out safely. Billy knows the Shadow Boss is still alive, but the Code of the Dragon will prevail. The Shadow Boss, as a cloud of black smoke, thinks otherwise.