Rail Wars! takes place in an alternate universe where the Japanese government remains in control of the nation's railway systems. Because of the stability afforded by the leadership of the government, the railway system is allowed to flourish. Naoto Takayama aspires to become an employee for Japan National Railways because of the comfortable life that it will enable him to live. In order to accomplish this he enters its training program, where students must demonstrate their knowledge of trains as well as their ability to be ready for any challenge that might arise. During this time period he will encounter other students such as the athletically gifted Aoi Sakura, the constantly hungry Sho Iwaizumi, and the human encyclopedia Haruka Komi. Together they will work towards surviving their trainee period, all the while taking on purse snatchers, bomb threats, and the looming specter of the extremist “RJ” group who wants to privatize the railway system.

The story begins when a middle school girl named Yume sees something fall from the sky, and meets a pale violet-colored kitten named Mew. It turns out that Mew has the power of "Yume Synchro" (Dream Synchro), the power to enter dreams. In the dream world, the girl and Mew collect Dream Stones.

One day, when Remu Mikage is on a video call with his sister, Shiki, who has traveled to the futuristic Okinotori-island Mega Float City for school, she confesses that both the audio and visuals of her are completely artificial. In order to be more efficient in her studies, Shiki has used neural-linked nanomachines to upload her consciousness onto a computer and is storing her physical body in a "body pool." While shocked, Remu is supportive of his sister's decision, until the disaster known as the "Early Rapture" happens. The Early Rapture causes everyone who has uploaded their consciousnesses to either fall into a coma or perish. Remu visits his sister's empty apartment one last time, but is shocked when Shiki arrives at the door. With no memory of her family or past, and being pursued by a violent group of researchers, Shiki and her brother are forced to flee using her newfound power of nanomachine manipulation.

After returning from the feuding realms of Gundalia and Neathia, Danma Kuusou and his companions continue their lives on Earth. Now, a year later, the virtual reality world of Bakugan Interspace has finally recovered from the alien invasion and has once again become a place for brawlers to gather and challenge themselves. It turns out, however, that whenever Danma's Bakugan, Pyrus Dragonoid, unleashes his might in battle, the Interspace experiences new disruptions. Unable to harness the incredible powers granted to him by Code Eve—the Bakugan Mother spirit—he struggles to maintain control over the Mechtogan contained within him. When it goes out of control, the mysterious mechanical entity wreaks havoc on the battlefield, attacking friends and foes alike. To make matters worse, Bakugan Interspace is at risk of being infiltrated again. An unknown mastermind is sending mutated Chaos Bakugan into the system in order to brainwash brawlers and take control of the virtual realm. In anticipation of the inevitable confrontation, Danma must find a way to keep the Mechtogan's destructive force at bay and rally the Battle Brawlers once again. [Written by MAL Rewrite]