'Ghostly Mother Blue Flower' Chiu Choi-wan has abducted a group of virgin boys and girls for the nourishment of her mind and soul. Alarmed by the abduction, Yiu But-fan, Kau Suet-mui and Hung Tin-bo make a night raid on the Hanshan Temple to release the children and set a torch to the bandit lair. Fuming over the arson, Chiu casts a spell on Kau, who kills the father of Chuk Yuk-heung in her cross-dressing persona as Yiu. Confronted by the angry Chuk clansmen at the Chuk Fortress, Yiu tries futilely to defend his innocence. Believing that Chiu has masterminded the framed murder, the fugitive infiltrates the White-bone Yinyang Cave where he finds himself attacked by Kau and Chiu. Demon-vanquishing Magic Monk, Chuk and Hung helped Yiu wrestle Chiu, who fled. Kau is nursed back to health by the monk and joins the fellowship in their quest to annihilate the demon. With all her venomous needles forfeited to the monk, Chiu gets her comeuppance, slain by Chuk's flying dagger.

Yiu But-fan marries on the day his father Yan-kit retires as a distinguished swordsman when Yan-kit's nemesis 'Ghostly Mother Blue Flower' Chiu Choi-wan and her foster son Lai Chun-wah gatecrash the party, striking dead the elder and But-fan's wife with the White-bone Soul-thrashing needles. Having pledged his alliance to the anguished son, Taoist Tranquil of Emei vows to eradicate the menace at Mid-Autumn Festival when his junior disciple Kau Suet-mui is challenged to a duel with Chiu. Kau's fellow disciples Hung Tin-bo and Chuk Yuk-heung follow the orders of their master to roam the martial world and tumble into a bandit lair. Extricated from danger by the Taoist, the duo join hands with the passer-by Yiu to thwart Lai's assault on Kau by sorcery, again aided by the Taoist. Yiu, Kau and her peers head back to the Kau Fortress where a martial contest is being held to select a prospective groom for the daughter. Kau overwhelms Lai in the ring but concedes defeat to Chiu.

Her mind deluded by Elder Three Unsurpassed, Ng Yu-ying is about to surrender the captured Chan Lam to Oh Yu-kan and Ho Yim-wah when his senior master Lee Kei comes to save the day, warding off the conspirators. Restored to sanity by the antidote delivered by her mother, Ng bids a silent farewell and pleads to be made the protege of Black Raksha. With Fairy Crimson Pearl leading the way, Chan rescues Chung Siu-chui and Chor Ling imprisoned at the White-bone Sect and survives the bombings orchestrated by Oh but finds himself cornered by beguiled members of the seven leading martial sects. Ng dons a mask and teams up with 'Little God of Hades' to break the siege, pursuing their nemesis to the Fiery Fire Sect where Chan and cohorts finally eradicate Scholar Four Poisons and Oh, the latter confessing to the murder of Chan's father at his last breath. Ng wields the Raksha Order to avenge her father's death, perishing together with her mother.

Kwok Sau-yuk fails to ward off the advances of Scholar Four Poisons while mourning the murder of her husband. Master Chung comes to help and asks Kwok's son Chan Lam to look for his daughter Siu-chui before dying. Hurled into the Blood Pool, Chan chances on Ng Yau-nin, a victim of the intrigue hatched by his wife Ho Yim-wah and her lover Oh Yu-kan. Ng bequeaths to Chan a sword, and the Book of Blood Devil Moves unearthed from the cave and entrusts his daughter Yu-ying to his care. Having mastered the art, Chan emerges from the abyssal waters and becomes the 'Little God of Hades.' He is soon kept under lock and key by Oh who wants the Book of the Yellow Emperor. Treating Chan with a antidote, Yu-ying escapes with Chan after learning his father’s intrigue, only to be hit by a pang of loss and agony upon Chan's reunion with senior master Lee Kei and Siu-chui, his betrothed fiancee. Instigated by Oh, Chan finds himself confronting members of the seven leading martial sects…