The Eyes of the Dragon is a tale of chivalry and heroes that could easily fit with the tales of King Arthur and the Knights of the Round Table. The novel follows the story of Flagg, the King's magician, and his plan to bring ruin to the kingdom of Delain. Flagg kills the King and frames his heir, Peter, with the murder. After Peter is put in jail, Flagg runs the kingdom behind the new, weak king, Thomas. However, Flagg has underestimated Peter's determination to clear his name and save his kingdom. The Eyes of the Dragon is a tale of deceit and honor that will surprise and please even the most dedicated King fan.

Roland is a good king even though he is not the smartest man around. Roland surrounds himself with great advisers, including his magician, a man named Flagg. Flagg has been a part of the kingdom since before Roland became king and Roland's mother ruled. However, Roland's mother never trusted Flagg, and Roland has not trusted Flagg completely. When Roland marries late in life, this trust becomes even more strained because Roland's wife becomes his most trusted adviser.

Roland, who is a great hunter, kills a dragon one afternoon and afterward conceives with his wife the child that will become his heir, Peter. A few years later, with the help of a potion from Flagg, Roland and his wife conceive their second child. However, Sasha, Roland's wife, dies in childbirth. The kingdom falls into mourning at this tragic death, a death that would prove to be even more tragic if anyone learned that Flagg, unhappy with Sasha's influence over her husband, had paid the midwife to inflict a mortal wound to Sasha during the delivery.

Years pass as both boys grow and mature. Peter is the spitting image of his mother, tall, graceful, and highly intelligent. Thomas is more like his father, short, chubby with a bowlegged walk, and slow when it comes to learning. Thomas is an expert with the bow and arrow, like his father, but this small accomplishment does nothing to diminish the light that shines every time his brother walks into a room. Thomas finds himself often pushed aside, unnoticed. Thomas' closest friend becomes Flagg, who often shows up when Thomas is at his lowest to attempt to cheer him up by showing him many of the secret passageways hidden inside the castle. One of the secret places Flagg shows Thomas is a room with peep holes through which Thomas can watch his father in his sitting room through the eyes of the dragon he killed years before.

When Peter is seventeen, Flagg hatches a plan to rid himself of both Roland and Peter. Flagg poisons Roland with a deadly sand that causes its victims to burn from the inside out. Flagg then takes the remaining few grains of sand and places them in Peter's room in order to make it seem that Peter killed his father. Soon Peter is taken to the prison at the top of the Needle and Thomas is made king with Flagg as his closest adviser.

Immediately Peter begins to plan his escape. Peter enlists the help of the very person who put him in prison and arranges to have a napkin brought with each of his meals, as well as access to his mother's dollhouse. Using the tiny loom in the dollhouse, Peter makes a rope out of threads he took from the napkins. Peter takes five years to make a rope long enough to try his escape, but by the time he is ready, people close to him have discovered evidence that Peter is innocent. On the same night Flagg discovers Peter's escape plan, he leaves his prison and faces Flagg in his father's sitting room, the same room in which Flagg gave Roland the poison that eventually killed him. While they argue, Thomas makes his presence known and reveals what he knows about Flagg's murderous plan. Thomas then fires his father's beloved arrow into Flagg's eye, watching along with Peter and their friends as Flagg disappears.