The Academy was founded by Seto Kaiba on a remote island in the Southern Seas, with its dormitories named after the three Egyptian God Cards, and is run by Chancellor Sheppard and his staff. The most elaborate dormitory, Obelisk Blue, is named after "Obelisk the Tormentor". The Obelisk Blue dormitory can be graduated to, but the only way to enter the dorm in the first year is to attend and do well at an affiliated junior school. As the highest ranked dormitory, Obelisk Blue's facilities are of the highest quality, on the level of the world's classiest hotels and restaurants. The center dorm, Ra Yellow, is named after "The Winged Dragon of Ra". Those who were given the highest scores in the entrance exam, or whose performance was mediocre in the junior school enter this dormitory, which, while not as extravagant as Obelisk Blue, still has incredibly clean and well-kept facilities as well as meals of a quality far above the lifestyle of the average salaried man. The lowest dorm, Slifer Red, is named after "Slifer the Sky Dragon". Those who scored poorly are put into the shoddy dorms of Slifer Red. The naming choices reflect Kaiba's bias over the God Cards in relation to his rivalry with Yugi.
For the first two years at Duel Academy, the main cast faced major threats including the Shadow Riders (Seven Stars), who intended to revive the Sacred Beasts by creating a strong dueling presence on the island, as well as the Society of Light, which intended to enslave humanity with the world-destroying satellite of Misgarth (in the dubbed version, their aim is to brainwash the world with the satellite). During the third year-right, as a result of Thelonious Viper's schemes (Professor Cobra), Duel Academy is transported to another world, a desert plane with three suns and resident Duel Monster spirits, right into the hands of Yubel. Upon returning home, Jaden and a select group of his partners dive into the rift left in their escape to recover their missing companions and embark through second and third worlds where losing a duel is fatal.
In the second half of their third year (Season 4), the characters reflect upon their upcoming graduation and what to do afterward, such as Alexis Rhodes considering becoming a teacher, and Syrus Truesdale taking up his brother's legacy as a Cyber Style duelist. A villain named Trueman also appears and is somehow connected to Atticus and the abandoned dormitory. Later it is shown that Trueman was a minion of Nightshroud, who was previously a secondary antagonist from the first season.