Damashi appeared during Shujinko's quest for the Kamidogu, as portrayed by the Konquest mode of Mortal Kombat: Deception. Decades ago, Shujinko was approached by an ethereal spirit entity that called itself Damashi. Damashi claimed to be the agent of the Elder Gods who was tasked with finding a mortal who had the courage and potential strength to undertake a quest for the Elder Gods. Shujinko, then only a child, eagerly accepted and Damashi charged him with gathering the six Kamidogu of Earthrealm, Netherrealm, Chaosrealm, Outworld, Orderrealm, and Edenia. To aid Shujinko in the quest, Damashi mystically instilled in Shujinko an enhanced ability to observe and then wield the Kombat abilities of warriors that he came across.
However, in reality, Damashi was not an agent of the Elder Gods. Ages ago, the Dragon King, Onaga, was slain by Shao Kahn. But, even from the void, his essence could manifest within the realms. Damashi was actually Onaga's essence, extending into the realms. Thus disguised, "Damashi" was able to manipulate Shujinko into undertaking a quest to collect the Kamidogu.
Though it took decades, Shujinko was able to gather the Kamidogu of the realms. Thereafter, he began making his way back to the Nexus where he planned to present the Kamidogu, thus gathered, to the Elder Gods. However, Onaga confronted Shujinko and revealed that Damashi was an apparition through which he had manipulated Shujinko over the years. Onaga, after taking the Kamidogu for his own, traveled to Outworld to re-assume his throne as the original ruler of the realm. From there, he intended to use the Kamidogu to attain ultimate power by remaking the realms in his image.
Shujinko, now fully understanding this threat to the realms, born from deception, resolved to stop Onaga.
Shujinko's quest was completed by defeating Onaga.