Dragon's Lair: Time Warped is an animated video game directed by Don Bluth. As with the original, Dragon's Lair II: Time Warp consists of an animated short film that requires the player to move the joystick or press a fire button at certain times in order to continue. It takes place years after the original Dragon's Lair. Dirk has married Daphne, and the marriage has produced many children. When Daphne is kidnapped by the evil wizard Mordroc in order to be forced into marriage, Dirk's children and his mother-in-law are clearly upset by the abduction of Daphne, and Dirk must once again save her.
Dirk the Daring must find and rescue Daphne with the help of a well-spoken time machine. It seems that the time machine is (or has been) possessed by the brother of Mordroc, the foul wizard that has kidnapped Daphne. Dirk travels through several dimensions and historical eras searching for Daphne, some inspired by classic stories and fairy tales such as Alice in Wonderland and Sleeping Beauty, to prevent Mordroc from enslaving Daphne to his whim with the dreaded Death Ring. Voice actor Michael Rye reprises his role as the narrator in the attract sequence, as he did with Dragon's Lair as well as Space Ace.
Gameplay differs from the original in two important ways. First, it follows a linear sequence of events which flow one into the next, as opposed to the randomized sequences of rooms from the first game; "dying" in the sequel also forces the player to resume from a checkpoint in the level rather than starting a randomly different level as in the original. Second, golden treasures are scattered throughout the game; getting each treasure is optional and requires an extra move, but the player is awarded extra points. If the player misses any, at the end of the game it loops back to the first treasure missed. As well, unlike in the first game, the actions the player must do are prompted by a brief flash of what Dirk should use or where he should go next.
Development on the game began in 1983 after the success of the original Dragon's Lair, and finally reached arcades eight years later, hence Leland Interactive's credit on the title screen, although a commercial from Don Bluth Productions featuring completed animation from stage 3 in the game had aired on television in 1984 Actually creating the game's animation took three years.
- Stage 1; Dirk is terrified of his angered mother-in-law trying to smack him with a rolling pin or toss destructible objects towards him for her revenge on him because of the kidnapping to his married Princess Daphne by Mordoc. He must flee from her while getting past several creatures and obstacles in the deceased Singe's old castle, including a ravenous snake wearing a Tam o' Shanter, in order to reach the time machine that will allow him to pursue Mordroc.
- Stage 2; In prehistoric times, Mordroc takes a moment to taunt Dirk as he battles pterodactyls, a T-rex, and two bat-winged centaurs that carry Daphne away. As this happens, the tiny island they are on gradually crumbles into the sea.
- Stage 3; In 1865, Dirk is materialized in Alice Liddell's house and goes through the looking-glass that hangs over the fireplace. While being dressed as Alice by enemy characters, he tumbles into Wonderland where he faces Tweedledum and Tweedledee, the Queen of Hearts, her army of playing card soldiers, the Mad Hatter and the March Hare, the Jabberwocky and the Cheshire Cat.
- Stage 4; In the Garden of Eden, Dirk has to escape from guardian angels, the advances of Eve the fat Lady, two snakes (one wanting to eat Dirk and the other a smooth-talker), and finally, the ruin of Eden itself when Eve accidentally eats the forbidden apple.
- Stage 5; In 1808, Dirk is shrunk to the size of a mouse in Ludwig von Beethoven's study, where he must avoid the predations of the composer's constant playing the piano with his hands, his wicked hungry cat and the sheer chaos of his creative gust.
- Stage 6; In Ancient Egypt, Dirk finds what appears to be Daphne (wrapped completely in linen bandages) but is actually Mordroc in disguise, leading Dirk on a wild goose chase as he explores an ancient tomb while narrowly avoiding poison gas, spiders, giant bats, corrosive acid, scarabs, and a giant mummy.
- Stage 7; At his castle, Mordroc puts the Death Ring on Daphne's finger, which transforms her into a monstrous banshee. Dirk must avoid the monstrous Daphne's mindless attempts to devour him. He must get the ring off her finger, restore her to normal, and defeat Mordroc at the same time. In addition to the alternate scene in the non-arcade version, Dirk has to remove the ring from Daphne and throw it at Mordroc.
- Final Stage; Although Mordroc is defeated, Dirk must fight off Mordoc's last surviving minions, who are trying to get their revenge on him for defeating their master, so that Dirk safely escapes the crumbling castle with Daphne.