The Eyes of the Dragon is the story of Peter and Thomas, the two sons of old King Roland of Delain. Peter, the eldest, is first in line to become king, but is framed for the murder of Roland by his adviser, Flagg. Upon Peter's imprisonment, the weak and easily influenced Thomas becomes king, allowing Flagg to become the ultimate power behind the throne. This fantasy novel explores the ideas of power, corruption, and good versus evil.
The Eyes of the Dragon takes place entirely within the realm of Delain (which itself is located within In-World from The Dark Tower series, as established in "The Little Sisters of Eluria"). It is told from the perspective of an unnamed storyteller/narrator, who speaks casually and frankly to the reader, frequently adding his own commentary on characters' motivations and the like.
King Roland's magician, Flagg, seeking to destroy the Kingdom of Delain, sees his plans being ruined by the good heart of Queen Sasha. After Sasha gives birth to Peter, a noble and worthy future king, Flagg realizes that his position, his plans, and his life may be in danger because of Peter. When Sasha is pregnant with a second son, Flagg seizes the opportunity. He forces the Queen's midwife to cut Sasha as the second son, Thomas, is born. Sasha bleeds to death and Flagg begins plotting to remove Peter. As Peter becomes a teenager, he begins the custom of bringing a glass of wine to his father before bed each night. Flagg decides to use this as a means of framing Peter. He dissolves a poison called "Dragon Sand" in a glass of wine and delivers it to the king after Peter leaves. Previously, in an attempt to win Thomas' friendship, Flagg had shown him a secret passage where Thomas could spy on his father. Unbeknownst to Flagg, when he delivers the poison, Thomas is watching through the glass eyes of the mounted head of Roland's greatest trophy, the dragon. Flagg plants evidence incriminating Peter.
After a brief trial, during which the judge decides Peter is guilty, he is locked up in the enormous tower called the Needle in the center of the city. Thomas is then crowned King, although he is only twelve years old; due to his youth and his fearful inexperience, he allows Flagg enormous amounts of power. At the start of his long stay in the Needle, Peter manages to send a note to the judge who convicted him, Anders Peyna, with the seemingly innocuous requests to have his mother's old dollhouse and napkins with his meals. Peyna is puzzled by the requests, but, seeing no harm in them, grants them. Five years later, Peter escapes from the Needle, having used the toy loom in the dollhouse and threads from the napkins to make a rope.
After the escape he and his allies rush to get Roland's bow and arrow. However, it is not to be found because Thomas had it once they got into the king's "sitting room". Flagg, now revealed as a demonic being, is about to kill them when Thomas reveals himself and tells Flagg that he (Thomas) watched Flagg poison Roland. Thomas shoots Flagg in the eye, but Flagg uses magic to disappear and escape. At the end of the novel, Peter is declared to be the rightful king. Thomas, who has become deeply hated in Delain, sets off alongside his butler, Dennis, to find Flagg. They find him and confront him, but the narrator does not reveal the outcome.