The Ji Ho Ninja clan vow to destroy the monks of Shaolin temple. To do so they must first perfect many of their techniques in order to ensure the battle will be won. The temple finds protection from monks who set out to save it.

The film was created by re-dubbing footage filmed for the 1986 Taiwanese kung fu film Ren zhe da (known in English as Ninja: The Final Duel). Ren zhe da producer Robert Tai had reportedly filmed 10 hours of footage for the film that was cut to 90 minutes for release. Much of the footage that was not included in the release of Ren zhe da is included in Shaolin Dolemite as well as original footage of Moore observing the story of the film and making obscenity-laced comments. Other new footage includes a segment portraying Moore's long time friend Jimmy Lynch as a Drunken Master named Sam the Spliff.

The second movie Robert Tai made out of his original Ninja: The Final Duel footage. This one was used largely as the basis for Shaolin Dynamite.

Sewage workers Jack and Charlie get involved in an international Asian gang war when Jack helps the boss of a Shanghai gang against one of his rebellious underlings. This underling then strikes a deal with the Japanese Yakuza in the hopes of toppling his boss and become the leader of Shanghai himself. When the Yakuza assassinate the Shanghai boss, Jack pledges to avenge his new friend's death. As he seeks out those ultimately responsible, he does battle with a variety of ninjas and mercenaries from around the world.