Dhalsim is a wise and peaceful Yoga Master who believes that force should only be necessary as a last resort against unrelenting evil. Dhalsim's complete control over his own body and mind have given him the ability to alter the nature of his physical form. Dhalsim can bend and stretch his arms and legs with inhuman flexibility and can channel his powers into devastating fire attacks such as the "Yoga Inferno". When Dhalsim discovers Apocalypse's sinister plan to control both the Capcom and Marvel universes, Dhalsim confronts Apocalypse in an effort to thwart the evil despot.

As the world's first mutant, Apocalypse has vowed to let natural selection determine the world order as he pits mutants and humans alike in battle against each other to enforce his code that only the strong are fit to survive. He views the X-Men as pawns in a game he will ultimately win and uses each Street Fighter to further his goals for domination of both the Marvel and Capcom universes. Sensing Dhalsim's presence, Apocalypse grows to massive proportions and transforms his arm into a drill. Apocalypse meets Dhalsim as they battle in Apocalypse's lair for the fate of two universes.