The cage is an old storage area inside the boys locker room at South Oak Cliff High School.
Staff members allegedly used the cage to let students settle differences.
One former employee claims it was gladiator-style entertainment for the adults.
Fired guidance counselor Frank Hammond has filed a whistle-blower lawsuit against the district.
He says he heard the former principal order a security guard to take students to the cage to settle differences.
"There were times when I would go downstairs to try to see if there were any children and they were always on guard whenever I would come around," Hammond said.
The grandparent of a former student says the fights were common knowledge.
Superintendent Michael Hinojosa told the Dallas Morning News some unacceptable things happened in a cage, but those involved were later disciplined.