A group of dragons called the Talons of Peace seeks to fulfill the prophecy by collecting five special eggs, born on the brightest night. The dragonets must come from the tribes of the SeaWings, NightWings, SkyWings, MudWings and SandWings. But one of the warring queens purposely breaks the SkyWing egg, causing the dragonet caretakers to make a last minute change of plans. Though it is outside the prophecy, they quickly substitute a RainWing egg.

The story picks up six years later and is told through the eyes of a dragonet named Clay. He and his friends, Tsunami, Sunny, Starflight and Glory (the RainWing dragonet) live beneath a mountain. They are under the care and training of the Talons of Peace supporters, dragons named Kestrel, Dune and Webs. When the dragonets decide to escape from the cave where they live, they and their guardians are captured by Scarlet, the fierce SkyWing queen. Scarlet makes her prisoners battle in an arena. She pits them against her champion, a dragon named Peril, whose mere touch sets others ablaze. Despite their strained circumstances, Peril and Clay become friends.

The dragonets make several thwarted escape attempts. Scarlet puts Kestrel on trial, and Peril discovers Kestrel is her mother. Burn, one of the hopefuls to be queen of the SandWings, visits Scarlet. When they learn Scarlet plans to give Sunny to Burn as a gift, the dragonets are all the more anxious to escape. Queen Scarlet puts on an elaborate show for her guests by pitting some of the dragonets against one another in the arena. When the excitement doesn't satisfy her, she puts Clay and Peril together to fight. They battle, trying to figure out how not to kill each other. At a critical moment, Glory attacks Scarlet with her powerful poison. The dragonets, with Peril's help, make their escape. They invite Peril to join them, but she feels she has work to do on herself before she can be the dragon of her destine.