During Underground construction in London around the year 2008, a huge, hibernating dragon is discovered and springs to life, instantly incinerating all construction workers with its fiery breath. The only survivor is the 12-year-old Quinn Abercromby (Ben Thornton), whose mother (Alice Krige) was chief of the construction crew. The dragon escapes, and soon thousands of them work their way through Europe and eventually the rest of the world, burning everything, feeding on the ashes, and multiplying at an exponential rate. The world powers use their most powerful weapons, but this only hastens the destruction of the planet.
In 2020, the adult Quinn (played by Christian Bale) leads a colony of survivors in a medieval stone castle in Northumberland, a lonely bastion of mankind, afraid of the sky and the dragons that could attack any time. Their hope is to outlast the dragons, wait until they die out again (as they presumably did several times before) and go into hibernation. Unfortunately, the people are beginning to starve while waiting for their crops to ripen. Quinn finds it difficult to keep members of his colony from harvesting from their crops before they've matured. One morning a small team sneaks out to harvest tomatoes. They draw the attention of an attacking dragon that burns a few of them and torches most of the remainder of the crop. Quinn and his friend Creedy rescue the survivors in armored vehicles. At night, Creedy and Quinn entertain the kids of the colony with a playacted rendition of Star Wars. They also have the kids recite a prayer warning them to watch the skies for dragons and dig tunnels to survive.
One day, a team of American dragon-slayers arrive in an armored column, led by Denton Van Zan (Matthew McConaughey) and bringing a Chieftain tank and an Agusta A109 helicopter, piloted by Alex (Izabella Scorupco). The American team's request to enter the castle grounds is first refused by Quinn. Van Zan shows Quinn a dragon's tooth he wears around his neck, saying that it came from the 1st one he killed in the American Midwest. Van Zan had figured out a way to attack dragons when they are most vulnerable: dragons have excellent vision at both day and night but during "magic hour" their vision is impaired and what they see is unfocused.
Mistrusting, but needing each other, the two leaders Quinn and Van Zan work together and eventually manage to kill the dragon that destroyed the crop. Van Zan's team use a sophisticated triangulation system using small remote tracking devices that allow parachuting commandos to draw dragons into the range of Van Zan's arsenal of weapons. Two of the three skydivers are killed by the dragon, one lands safely and the operation is successful -- Van Zan himself kills the dragon when Quinn, riding on horseback, is able to lure it close enough to a large harpoon cannon.
The inhabitants of the castle, having not seen a dragon slayed, celebrate the victory that night, only to be chastised by Van Zan, who is disgusted by their behaviour, having lost three of his team in the battle.
Afterward, Van Zan and Alex tell Quinn that all dragons his unit have encountered so far are female. Their theory is that they are like fish; the females lay their eggs around the world, then the male comes and fertilize them, leaving them with the theory that there is only a single male within the whole dragon population world-wide.
The next morning, Van Zan requests that members of the colony join him in hunting the male in London. All are reluctant and Van Zan announces he will choose volunteers. Quinn objects and the two fight with each other, Van Zan gaining the upper hand. Furious, Van Zan leaves anyway.
Van Zan and his unit discover a road block on the road to London. Van Zan then sends Alex to find a new way around. The male dragon soon arrives and annihilates nearly the entire army, breathing fire on Van Zan's armored column and incinerating all but him alone. The male dragon follows their route back to the castle and destroys it. The castle inhabitants are however saved by hiding in an underground shelter that is designed to survive the intense heat, but Quinn's dear friend, Creedy, is killed, as he tries to go save more people in the castle.
Defeated, Van Zan returns to the castle, rescuing Quinn and the surviving children from the castle's cellar. Quinn tells Van Zan that he will join them to hunt the male dragon in London. They use the helicopter to follow the coastline to the city, unnoticed, where they learn that the dragons are beginning to starve and are resorting to cannibalism. As they look over the ruins of the London skyline, the male suddenly appears and eats one of the females.
Denton's plan is to fire an explosive charge, placed on a crossbow, into the dragon's mouth during the brief moment it inhales, drawing air to produce fire. Van Zan will be the bait, stationing himself atop a tall smokestack. His one shot with a crossbow misses entering the dragons mouth. The dragon rushes Van Zan's position; Van Zan fanatically leaps from his perch, attacking the dragon with no more than his axe and is swallowed in mid-air.
Quinn and Alex are able to lure the dragon to street level. The dragon hunts them, however it is magic hour when the dragon's vision is impaired. After recovering the dropped crossbow bolts, Quinn is able to fire one into the dragon's mouth where it explodes, killing the beast.
At least three months after the male dragon is slain, Quinn and Alex are seen erecting a radio tower and receive a transmission from another group of survivors in France.