During the War of Resistance Against Japan, a CCP army unit guarding the southwest border follows what is ostensibly a trading caravan and discovers that these traders are actually smuggling arms and spy equipment to Chiang Kai-shek and his American allies.

Four travelers attempt to escape a small town in Manchuria, but their bus breaks down on a dirt road. Unwilling to be left homeless, they return and rent rooms at a hotel. Meanwhile, a young man named Zhicheng, a local buffoon in love with the innkeeper's daughter, encounters the spirit of his ancestor. The spirit predicts a great future for Zhicheng and the attainment of happiness, but to achieve this, he will have to defeat villainous bandits.