According to Chinese legends, a barbarian chief named Fan sought to befriend the Chinese emperor by creating two magic swords for the king. The emperor was at first skeptical of the swords' capabilities, and decided to test their magical abilities for legitimacy. He used the swords to cut a mountain, and sliced it in half; out of the mountain arose many great dragons. The emperor hitched the creatures to a flaming sky-boat and flew across China, uniting the people under one nation. Since then, as long as the emperor held the swords and rode the dragons, China was strong.
However, one day a jealous cousin of the emperor poisoned his relative. Fortunately, the swords were carried away to safety by a faithful servant via the dragon-boat, and both the swords and the dragons remained on the Isle of Dragons (i.e. Dinosaur Island).
By 1928, rivaling political factions - the Chinese Nationalist and Communists parties, and the Japanese - sought to locate the Swords of Fan to unite their country before their respectful rivals do; in Japan's case, their plan was to conquer all of Asia. Generalissimo Chiang Kai-Shek (with support from American General Joseph Stilwell) hired retired western vigilante Bat Lash, Biff Bradley, and renowned airplane pilot Enemy Ace to find the swords.
The megalomaniac immortal Vandal Savage also sought the swords, and manipulated a group of Communists, led by Miss Fear, and Japanese, led by Major Kung of the Dobutsu Ninja, into fighting each other. Savage was the first to obtain the swords, and learned that the swords controlled Dinosaur Island's saurian inhabitants; he then battled Bat Lash until he was defeated and impaled by a triceratops rode by Biff Bradley.
With the Communists and Japanese parties eliminated, Batlash, Enemy Ace, and Miss Fear decided that the swords were not to fall into the wrong hand. To that end, the three claimed to Chiang Kai-Shek that the "dragons" were a myth, and that the Isle of Dragons was in fact Komodo Island, and that the island's komodo dragons were mistaken for the legendary creatures. The trio gave Chiang the swords, which he now believed useless; he secretly disposed the swords into the waters of Shanghai's harbor at the request of Vandal Savage, who was also secretly manipulating Chiang.