The series takes place 10 years after the conclusion of SD Gundam Gaiden: Kikōshin Densetsu. The designs of he characters come primarily from Mobile Suit Victory Gundam, with some plot elements coming from Star Wars and Fist of the North Star.
- The Strongest Devil Dragon Swordsman
While traveling to the Holy Knight Tournament, Knight Marbet is attacked by a group of bandits and injured. She is assisted by Zero Gundam, who acts as her proxy in the tournament. While participating in the tournament, the bandits from earlier, known as the Hell Axis gang, attack in order to steal the Silver Halberd. The Hell Axis gang used the technique "Gale Tornado", which Zero questions and summons Dragon Machine Dragoon from the sky. In order to figure out how they obtained the techniques, Zero follows the bandits to Luna II Village.
- The Illusion King's Challenge
In Luna II village, Vice Gundam was waiting for Zero. It was a trap meant to summon Dragoon. Vice responds by summoning his own machine soldier, Vizad, and the two begin to fight. During the fight, it is revealed that Vice is actually Zero's father and he becomes upset. He is then assisted by Knight Victory, who forcefully makes Zero retreat.
- The Dragon's Successor
In order to obtain the holy heart, Victory takes him to the sacred land of the Thunder Clan, Riga Mountain, for training. Meanwhile, the kingdom of Dresden is invaded by the Illusion King to obtain the wish-granting Rosetta Stone to power the Doom Halo super weapon. Using the ruins' power, he intends to turn the world into the Zanscare World. At the same time, the Union Clan formed a collation force to attack the Doom Halo. Zero with Dragoon also rushed into battle in the middle of his training. After many fights, he encounters Vice again. Zero manages to awaken the holy heart, not out of hate, but to save his evil-tainted father. He summoned Mars Dragoon and defeated Vice Gundam.
- The Holy Dragon King
Although the fight has ended, the Doom Halo has resulted in the annihilation of the Union Clan, and the Saddrac World has become the so-called Zanscare World, a world of only monsters. A few months have passed since then. Zero then appears as a mystery knight in the Zanscare memorial ceremony. He is aiming for Illusion Emperor Assault Buster's life. He tries to finish it with one strike! ...but!
Devil Dragon Blade Zero Gundam→Devil Dragon Knight Zero Gundam→Holy Dragon Knight Zero Gundam
A traveling swordsman searching for his father's enemy, Vice Gundam. The controller of the Dragon Machine Dragoon and heir to the Thunder Sword. In his Devil Dragon Blade form, he can release his armor's limiters to change its shape. He becomes Devil Dragon Knight after training at Riga Mountain, and was entrusted the final key to the mystery by his father, Vice (Falco), making him a Holy Dragon Knight. In the final battle, he is able to surpass his father by going beyond the clan's Thunder System and activating the Plasma Dragoon, which created the Zero System. His catchphrase is "Return to Zero!!" (無に帰れ！, Zero ni kaere).
- Design Basis: LM314V21 Victory 2 Gundam
A former candidate for the Thunder Sword. Although he won against Zero in the battle to become the successor of the Thunder Sword, the Thunder Sword chose Zero, and therefore rejected him as the successor. He currently is the priest of Riga Mountain and gives trials to those who visit. He gave Zero the Dragon Pulsar after the latter had grown into a Devil Dragon Knight. He appears to be an old friend of Zero, and has a relationship with Knight Victory of the Storm Clan. Despite disappearing in "The Dragon's Successor", he and his machine soldier reappears as spirits in "The Holy Dragon King" to assist Zero.
Dragon Knight Falco Gundam→Holy Dragon Knight Falco Gundam
The previous successor of the Thunder Sword. Zero's father, who has been said to have been killed by Vice Gundam. Decades ago, when he was a member of the Britis Kingdom's Knights of the Round Table, he traveled to the region of Granada and disappeared after encountering a strange storm. Around this time, he met Javor and became friends with him. While in the center storm, he fought Fuller Zataron alongside Javor and Conan while defending Zero. Falco defeats him, but runs out of strength and challenges the Illusion Emperor in order to allow Javor and Zero to escape. He loses and is brainwashed as a result.
- Design Basis: ZMT-S16G Memedorza
Appears in the Game Boy game. He was one of the candidates for the Thunder Sword, but was removed due to his wicked nature. His skill "Vacuum Bolt" turns air into electrical energy and combines it with a high-speed slash.
- Design Basis: MSF-007 Gundam Mk-III
Appears in the Game Boy game. He was one of the candidates for the Thunder Sword who is the same age as Zero. Although his speed is great, he is weak in terms of power and was unable to surpass Zero.
Knight Victory Gundam
- Design Basis: LM312V04 Victory Gundam
A knight of the Storm Clan traveling to recover the Storm Sword. He rescued Zero, who would have been captured by Vice Gundam, and lead him to V-Square. Illusion Emperor Assault Buster is actually his older brother, Knight V2, who has fallen on the path of evil and he is working to stop him. Despite disappearing in "The Dragon's Successor", he and his machine soldier reappears as spirits in "The Holy Dragon King" to assist Zero.
- Design Basis: Marbet Fingerhat
A female Union Clan knight. She was attacked by the Hell Axis Bandits while heading to the Holy Knight Tournament and was assisted by Zero. She asked him to participate in her place after she becomes too injured to do so herself. After Zero gives her the money from the tournament, she buys herself new armor and a new machine soldier to fight the Zanscare Empire. At the end of the series, Zero gave her the Thunder Sword. (The reason why is not clear.) Later she infiltrates OZ World as Knight Hunter Bran Zoloat.
Holy Knight Neo Stride
One of the Knights participating in the Holy Knight Tournament. He served as the head of Granada's Royal Guards ever since he was young and had won the previous year's tournament. He saw Zero as a good rival and chased after him. Despite disappearing in "The Dragon's Successor", he and his machine soldier reappears as spirits in "The Holy Dragon King" to assist Zero.
Cyclone Knight Prost
One of the Knights participating in the Holy Knight Tournament. A soldier for hire that can pilot any machine soldier if asked. He became interested in Zero and chased after him. Despite disappearing in "The Dragon's Successor", he and his machine soldier reappears as spirits in "The Holy Dragon King" to assist Zero.
Knight GM Powered
- Design Basis: RGM-79 Powered GM
One of the knights participating in the Holy Knight Tournament. The pilot of Machine Soldier Tauros Hizack. He lost to Neo Stride's Metanal in the first round.
Knight J Jackson
One of the knights participating in the Holy Knight Tournament. The pilot of the Machine Soldier Hammer Ride. She challenged Zero's Re-Ga Kaiser in the first round, but was surprised by its strength.
Knight Refine Gouf
- Design Basis: OMS-07RF RF Gouf
One of the knights participating in the Holy Knight Tournament. The pilot of Machine Soldier A Zam Zam. The descendant of the Neo Zeon Clan's Gouf, but after the events of Kikoushin Densetsu, the two clans have been unified and is therefore a member of the Union Clan.
Knight Convert Jegan
- Design Basis: RGM-89B Jegan Custom
A knight from the Dabat Kingdom that participated in the Holy Knight Tournament. The pilot of Machine Soldier Orchisloid. He is highly skilled, but highly cautious and tends to make many mistakes. Although he beat A Zam Zam, he lost against Prost's Epco 94.
- Design Basis: Elle Vianno
One of the knights participating in the Holy Knight Tournament. The pilot of Machine Soldier Mirok Athena. She was dismissed for her dangerous tactics against Metanal.
- Design Basis: Meitzer Ronah
The King of Granada. He plans to incorporate outside machine soldier technology into the kingdom's military through the tournament.
Old Man Oi
- Design Basis: Oi Nyung
An old man watching the Holy Knight Tournament. He says that war will rage wherever the Devil Dragon Swordsman appears.
Epco Guild Army
A private group belonging to the Epco Guild. In the crisis of the Doom Halo, they fight using Epco Army Custom machine soldiers.
Machine Soldier Monster Reinforce Jr.
- Design Basis: Reinforce Junior
A monster with a massive body compaired to a machine soldier. It controlled a special kind of armor using magic.
Twin Knights Hexa Twins
- Design Basis: LM312V06 Victory Gundam Hexa
Made up of Hexa Elder and Hexa Young, they are brothers who live in Casarellia Village. Hexa Elder specializes in martial arts, while Hexa Young specializes in magic. Despite disappearing in "The Dragon's Successor", they and their machine soldier reappear as spirits in "The Holy Dragon King" to assist Zero.
- Design Basis: RGM-119 Jamesgun
Soldiers that guard Casarellia Village.
Warrior Rick GM
- Design Basis: RGM-79［G］ GM Ground Type
Warriors that protect the village of Casarellia. They originally left the army because of their dislike of fighting and had lived peace.
- Design Basis: RGM-122 Javelin
Warriors that protect the village of Casarellia. They felt that leadership within the thieves was different.
Knight Heavy Jegan
- Design Basis: RGC-90 Jegan Heavy Armor Type
Knights that protect the village of Casarellia. They were expecting the appearance of Zanscare within the enemies' movement.
- Design Basis: Helen Jackson
Pilot of Machine Soldier Jegain. She is forced to fight against enemy machine soldiers using "Gale Tornado".
Pilot GM Cannon
- Design Basis: RGC-80 GM Cannon
Pilot of Machine Soldier Cannongan.
Knight Captian Javor
- Design Basis: AGX-04 Gerbera Tetra
Head of the Knights of the Dresden Kingdom. He is a close friend of Zero's father, Falco, and had fought together with him in the past. Despite disappearing in "The Dragon's Successor", he and his machine soldier reappears as spirits in "The Holy Dragon King" to assist Zero. In the past, he was a member of the Britis Knights of the Round Table alongside Falco. He had gone as an advance team with him to investigate a mysterious incident that happened in Granada.
- Design Basis: LM111E03 Gunblaster
Union Alliance Soldiers launched to prevent the activation of the Doom Halo. They are mostly soldiers of Dresden.
Illusion Emperor Assault Buster
- Design Basis: LM314V23/24 V2 Assault-Buster Gundam
The true mastermind of the Zanscare Clan. Originally, he was Knight V2, the heir to the Storm Sword, who had developed a desire for power and joined forces with the Zanscare Clan living in the mirror world. He infected Falco with the Vice Tarantulla, and controlled him as his substitute. After using the Doom Halo to erase the Union Clan, he founded the Zanscare Empire and stood victorius. However, his ambition was crushed by Zero Gundam.
Illusion King Vice Gundam/Dragon Knight Falco Gundam
The head commander of the Zanscare Clan, whose goal is to destroy the Union Clan. It was first thought that he killed Falco Gundam, Zero's father, but he is actually Falco, who was brainwashed by Assault Buster. In addition to the Thunder Sword's skills he had since the beginning, he learned some of the Storm Sword's techiniques including "Vortex Thunder", "Black Tempest Sanctions", and "Dynast Heavy Cyclone".
- SD Gundam Gaiden: Knight Gundam Monogatari (Game Boy)