The game is set in Washington, D.C., United States, where President Ronnie (based on 40th President Ronald Reagan) has been abducted by the evil Dragon Ninja. The game begins with the following introduction: "Rampant ninja related crimes these days ... Whitehouse is not the exception". A Secret Service agent speaks to the titular "Bad Dudes", a tough and heroic duo of street-smart brawlers named Blade and Striker: "President Ronnie has been kidnapped by the ninjas. Are you a bad enough dude to rescue Ronnie?"