Description taken from Arcade version of this game

Princess Daphne has been kidnapped and is being held captive in the far reaches of a castle by a fierce, fire-breathing dragon named Singe. Only you, Dirk the Daring, can save her. You must infiltrate the castle and free her from the Dragon's Lair. Six years in the making, Dragon's Lair was developed by acclaimed animator Don Bluth (the creator behind the movies The Secret of NIMH and An American Tail) and was the second game to ever utilize laserdisc technology.

As Dirk, you explore the castle -- replete with obstacle courses and interesting characters to do battle with such as the Lizard King -- until your climactic battle with the dragon to save Princess Daphne. Controls in the game are somewhat unique. Since it is 22 minutes of pre-determined animated sequences, your job is to press a direction on the joystick or press your sword button at just the right moment. Whether this results in your moving on to the next room or viewing an entertaining death scene is up to you. ~ Christopher Michael Baker, All Game Guide