The Old Dragonslayer resides within the Blue Cathedral beside Heide’s Tower of Flame. He greatly resembles Dragonslayer Ornstein who guarded the Cathedral in Anor Londo in Dark Souls 1. Why or how this almost exact replica of Ornstein ended up in Heide is not explained. It is likely that the Old Dragonslayer is a ‘reincarnation’ of Dragonslayer Ornsteins soul, which was gifted to him and the Four Knights by Gwyn. This seems most probable because:
1. The Dragonslayer is very similar to Ornstein in both look and combat style, but with a few significant differences. The armor is darker, the attacks utilise Dark (unless you are skewered on his spear which uses lightning) and the Old Dragonslayer does not appear to be as agile as Ornstein was, despite originally charging at you when you enter, he does not do this again. Gravelord Nito and the Rotten are thematically similar in the sense that they are an amalgamation of bodies, and the Rotten is a confirmed ‘reincarnation’ of Nito.
2. Almost everything about the Dragonslayer is described as Old, from his soul to his in battle name to his Old Leo Ring. The four great souls of Gwyn, Nito, the Witch of Izalith and Seath the Scaleless are also all classed as Old (Old King Soul, Old Dead One Soul, Old Witch Soul, Old Paledrake Soul). The title of Old seems to be used to refer to something incredibly ancient (an exception being the Old Iron King), and perhaps a ‘reincarnation’.
3. The Dragonslayer soul creates Ornstein’s Ranseur (Dragonslayer Spear). While this evidence can be used to further the idea that the Old Dragonslayer is Ornstein, but fallen to Dark, it could also mean that it is the same soul that has taken on a new form, like the other Old souls.
4. The Dragonslayer guards a cathedral like Ornstein. This speaks of thematic similarities as opposed to the same man just doing the same thing for his entire existence. The Old Leo Ring was beloved by the Old Dragonslayer. The fact that it was beloved indicates a strong dependence on it, and may imply that the Old Dragonslayer was in fact not Ornstein, who seemed to possess a certain confidence in himself, though this is just speculation.
So, while not conclusive, the evidence seems to indicate that the Old Dragonslayer is not Ornstein himself, but just a continuation of his soul finding a ‘new’ form. If that’s the case then where can we place Ornstein in the world of Drangleic? It may be that the kingdom in which the Old Dragonslayer resided came under attack by dragons or those using dragons to attack. We know of only one force that utilised dragons to attack; Vendrick’s Dragonriders. These dragonriders were said to have helped Vendrick found his kingdom, crushing the former inhabitants of the land and erecting Drangleic upon their graves. The Old Dragonslayer may have risen to the occasion and fought against these Dragonriders. We also know that Vendrick was originally a seeker of light, and his army with him. This would explain why the Old Dragonslayer utilises Dark in his attacks.
Interestingly, if the Old Dragonslayer did fight against Vendrick’s Dragonriders, it would serves as a sort of reflection of how Gwyn fought against the dragon’s to rise to power, but reversed, as Vendrick used dragons to rise to power.
However, very little is known about Heide, and it seemed to find its end by being subsumed by the sea (though an invading force may have had a hand in that, perhaps by breaking dams or walls holding water back) instead of at the hands of an antagonistic force.
When looking at the Old Dragonslayer what seems most likely is that From Software is just giving the loyal blatant fan service, but who can say for sure?