The mystical sword of the legends, the "Soul Edge", ended up in the hands of the dreaded pirate Cervantes de Leon of Spain. For the next 25 years, he stayed dormant on the remnants of a Spanish port town, taking the souls of those who reached him during their search of the sword. His reign of terror was soon to start, but through the joined efforts of Greek divine warrior Sophitia Alexandra and Japanese ninja Taki, he was stopped and killed, with one of the twin Soul Edge blades being shattered in the process. As it was about to tear itself apart, young Prussian knight Siegfried Schtauffen approached the port town and battled Cervantes, whose corpse had been momentarily reanimated through Soul Edge's will. After emerging victorious, Siegfried's attention turned unto the sword. The moment he took the hilt of the cursed blade, Soul Edge released a bright column of light into the sky. This was known as the "Evil Seed", bound to bring calamity and death in its wake.

Three years after those events, Soul Edge uses Siegfried as its host, and now Siegfried is Nightmare, a knight wearing azure armor and sporting a hideously deformed right arm. Europe plunges into a vortex of slaughters as he and his followers claim souls to strengthen the blade in its weakened state. Unknown to them, a group of warriors met on their journey to stop Soul Edge, and with them, three sacred weapons join once again.