The Second Madam Duan was not born into an aristocratic family like the Lady Li. Her family and the Zhang Family both followed the Great Ancestor Emperor to establish the World, but her family's contributions at the time were not as significant as the Zhang Family, and thus they were only granted the title of First-Rank General.
However, unlike the Zhang Family, the Duan Family didn't start from commoner status. The Duan Family was originally a City Guardian General of the previous dynasty and was later persuaded to surrender. The Great Ancestor Emperor admired Duan's Father for his talents and incorporated him under his command.
