Reiji Sagaya attended Kagura Private Middle School with Aoi Misato, where he was terribly harassed; he had been badly beaten by both male and female students, which caused him to be an introverted loner. In his misery, he befriended a stray dog he named Chibi (Tiny). In an effort to reach out to the poor boy, Aoi gave him a new bowl and food for Chibi, and Sagaya developed a crush on her. However, the bullies didn't approve of the loser liking the most popular girl in school, and killed Chibi in front of Sagaya.

Having withdrawn from social life entirely afterwards, Sagaya became obsessed with not only Aoi, but retribution as well. He began playing a text game called "Chaos" which inspired him to seek out the old bullies. He then obtained psychic power from the disruption in the Dragon Stream, and the aid of the pained spirit of Chibi that was resurrected by Tendou Kodzunu.

The "Dream Devil" was defeated by the Magami kids when he tried to capture Aoi's mind in his dreamscape world; and Chibi let go of his hatred when the spirit was soothed by a sympathetic Nurse Maiko. No longer vengeful, Sagaya slipped into a coma, and stayed in the Sakuragaoka Central Hospital. He was later roused by Aoi's suffering, using his psychic abilities to find her after she was taken by Kodzunu.

Reiji Sagaya then became a student of Dr. Iwayama's and an intern alongside Maiko - whom he developed strong feelings for.