Ah-fei and Dragon, students under the brother kung-fu masters Shorty and Uncle, are sent to clear the ghosts out of a haunted house. After a brief search, they soon find that the "ghosts" are nothing but props set up by a couple of con artists. After making quick work of the cheats, the fighting pair discover that there is actually a real ghost hiding in the house! Ah-fei and Dragon may have studied their martial arts well, but how do you beat up something that's already dead?

The plot centers on Little Lu (Sonny Yu) who tends horses for the local Shaolin temple, and wants to learn skills that will help him defeat some corrupt officials who want to destroy it. He has a couple of friends (one with no arms, the other with no legs) who help him train using some bronze mechanical horses in a secret room in the temple.

A patriot finds evidence that the government is collaborating with a foreign power. If the people knew about the deception, they would revolt and overthrow the corrupt government. One patriot in office steals the proof and must make it out of the country. He gets assistance from a local rebel leader who is in charge of a motley group of fighters called the Shanghai 13. Not all of them can be trusted, as some of them will turn in the government official. Our weak protagonist must run a gauntlet of the who's who already mentioned.

Young students of martial arts must prove themselves worthy to their overbearing Master.