The premise of LOBD is that a Blue Dragon is wreaking havoc in a town where the player has recently arrived. Multiple players compete over a period of weeks to advance their skills and to kill the dragon. In order to achieve this goal, players must face combat to gain experience. Once they have gained enough experience, they must face their master at Turgon's Warrior Training and advance in skill level. Advancement presents stronger enemies and masters; a player must reach level 12, the final level, before challenging Turgon himself and attacking the dragon.
Players select a character class, choosing from among Death Knight Skills, Mystical Skills, and Thieving Skills. While a player is training in a particular skill, s/he is subject to random events in the woods for that particular skill, which provide opportunities for advancement. Eventually, players may master all three skills.
Players can take a certain number of actions every day. Actions could be to fight monsters in the forest, attack other players or to attempt to slay the blue Dragon itself. In addition, every day a player can send a "flirt" to another player character which may range from a shy wink, to a marriage proposal.
There are three non-player characters located at the Inn: Seth Able the bard, Violet the barmaid, and the unnamed Bartender. Seth Able the bard will sing a song for a player. Once a day, players can listen to Seth's song and receive a bonus, such as the doubling of one's bank account, or additional forest or player vs. player fight opportunities. The Bartender provides services and information to any warrior who can pay him in gold or gems, but provides nothing for free.
Male players can also flirt with Violet, and female players with Seth Able, in a fashion similar to flirting with other players. Success is based on the player's charm points. A marriage to Violet or Seth may last one day or two months or more; unlike player-player marriages, the software may terminate these bonds at any time. During marriage, offspring are possible, and these bring sometimes surprising benefits to warriors.
LOBD allows many players to play simultaneously. This allows real-time player-versus-player battles.
LOBD features several in-game message boards, as well as a limited electronic mail system, which allow players to converse. Players may use the mail system to send flirtations to other players of the opposite gender, propose trysts, or marriage (only marriages lead to the conception of children).