When it was discovered that Kenshi Takahashi was a spy for Special Forces by infiltrating Daegon's Red Dragon clan, Daegon retaliated by openly threatening to murder Kenshi's lover Suchin and illegitimate son Takeda. Though Daegon's men succeeded in killing Suchin, she hid Takeda away, allowing his father to rescue him and flee for Shirai Ryu territory. Daegon sent his enforcer Hsu Hao to kill Kenshi and his son, only for Hsu Hao to die at Scorpion's hands.
Many years later, Daegon loans his soldiers to the Outworld general Reiko and the cleric of chaos Havik to aid them in their own plans to gather the Kamidogu. Mavado, Daegon's second loyal enforcer, would meet his demise at Cassie Cage's hands by his own hooksword. Daegon's Red Dragon forces suffer massive losses working with Reiko and Havik, and both the general and cleric would ultimately fail in their goals.
Daegon makes himself known when he confronts the armless Shokan prince, Goro, outside of his base in the Krimson Forest, calling Goro off from attacking his soldiers, telling the prince he has his attention. When Goro expresses interest in the Red Dragon's lore of the Dragon King Onaga, Daegon quickly realizes Goro was interested in the the fact that Onaga possessed regenerative powers. Daegon told Goro that he could help him, before asking why he should.
Goro then presents the beaten and unconscious body of the traitor, Kenshi, before Daegon. Pleased, Daegon called Goro a prince and agrees to help him. Kenshi later escaped from the clan.