In late 1983, work began on the animation for Dragon's Lair II: Time Warp, but it was halted in March 1984. Through the years though, Don Bluth and his crew continued work on it until it was finally completed in the late '80s. In late 1991, Sullivan Bluth Productions was ready to put the game into the arcades. Manufactured by the Leland Corporation, this release used a more reliable laserdisc player than the games of the '80s.

In Dragon's Lair II: Time Warp, the evil wizard Mordroc has kidnapped Daphne, and he transports her to different dimensions in time. Mordroc plans to marry Daphne with the "Death Ring" in the "Casket of Doom". Dirk uses a time machine that he finds in Mordroc's castle to travel through time and catch up with Mordroc and Daphne. Dirk must rescue Daphne before she is lost forever in the time warp.