Dragon Fighter IV was the only sequel to Dragon Fighter III. This game discarded the character roster from previous games, except very few characters.
Dragon Fighter IV introduced the Super Arts selection system and the ability to parry an opponent's attack. significant new gameplay changes had been introduced from the previous games in the series. For the first time, it allowed players to maneuver around an arena interacting with walls and other obstacles for extra damage. These "environmental hazards" in turn allowed players to juggle opponents for consecutive combos and allowed the designers to implement a "switch maneuver", which let players escape from cornering and throw the tide in their favor. The game engine had been tweaked to be more focused on the environment, causing the characters to move more slowly and fluidly than in Dragon Fighter III Evolution.
In addition, was introduced a comprehensive training mode. The mode consisted of an encyclopedia of fighting game terms, complete character command list walkthroughs, tips on all of the game's mechanics, recommended character combos, alternative options for failed combos, detailed command input timings, slow motion for frame counting and timing, and other useful training tips.
In Dragon Fighter IV was introduced also "Impeccability Challenge" , a beat 'em up mini-game, very similar to "Shadaloo Force" mode from Dragon Fighter III Evolution, where the player with an over-the-shoulder perspective as they fight wave upon wave of Illuminati's Army through six stages, eventually facing Gill.
Finally, the game introduced a brand new graphics system, that featured increased lighting, dynamic physics, and smoother surfaces.
Dragon Fighter IV received in general a mediocre review, highlighting the game's experimental and pretty nature, and that overall it is a more solid and thoughtful proposition than its predecessor, but also that the game feels "over-familiar and curiously uninspired".
Names in bold denote hidden fighters.