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BEN studies with madam KUNGSU and master YEUNG. KUEN is disappointed as GWAI GUK TSU prevents the two teachers from teaching him. BEN finds the studies too harsh. He tries to provoke the teachers, hoping they would send him away, but his plan does not work. BEN resorts to escape, but falls into a trap. Master YEUNG saves his life. GWAI GUK TSU reprimands him and tells him that he can only leave after he learns all the skills. A man with silver mask leads the killers and sneaks into SUN QIL's house to search for 'The Art of War'. They are overpowered by SUN QIL. A ,man with golden mask appears in time to save them.
Leader of the murder squad LIP WAN has an adopted daughter CHUNG LI-YIM. He makes up stories saying SUN QIL has killed her family. In order to take revenge, she learns a very dangerous martial arts style called the devil's claws. BEN gets KUEN's help and finally escapes. He finds SUN QIL and learns of the murder's pursuits. SUN QIL does not want BEN to risk his life. He sends him away as LI-YIM seeks him out for revenge. LI-YIM kills SUN QIL and his whole family.
BEN attempts to murder SZEMA PING, thinking that he is the killer. BEN fails and is arrested. BEN is on his way to exile when GWAI GUK TSU appears and saves him. Later on, they go and search for SUN LAN. They find SUN LAN who refuses to reveal the whereabouts of the book. LIP WAN wants the book too. He has LI-YIM impersonate as a slave to get near SUN BEN.
BEN gets injured for rescuing LI-YIM. LI-YIM nurses him, and love begins to develop between them. SUN LAN's daughter, HEUNG has secret admiration for BEN. She becomes wearied of LI-YIM's moves aril suspects that she is an inside-man. The book finally falls into the hands of SZEMA PING. As he is about to offer it to the Emperor Chun, he is attacked by men from rival country Chai. Emperor Chai finds out that the book is not 'The Art of War'. But he goes on with the celebration in order to impress his enemies. KU-YIM sneaks into the Chai Palace to steal the book. She is stopped by GWAI GUK TSU.
GWAI GUK TSU starts a fight with LI-YIM. As Chai soldiers close in, LI-YIM escapes. GWAI GUK TSU meets the Chai emperor and discuss politics with him. He has BEN and HEUNG sent to the Palace. SZEMA PING continues a plan to break the news about the book being a false one. BEN helps the Chai emperor to verify the book's anthenticity. Chai is impressed. GWAI GUK TSU helps the Chai Emperor to destroy Chun's devil plans. The Emperor promises to offer BEN a position after he graduates from his studies.
BEN is furious that the tomb of SUN QIh has been looted. GWAI GUK TSU advises him to remain calm in the meantime. SZEMA CHING thinks that her father CHING has got murdered. He decides to seek help from GWAI GUK TSU for revenge. She sets off for the Ghost Valley with KIT, and are robbed. KUEN happens to pass by and saves them. GWAI GUK TSU returns to the Ghost Valley with-BEN and HEUNG. He refuses to be the teacher of CHING. A contest is going to be held. The winning student will have the privilege to study Mok-Che swordplay. KUEN is full of hope.
BEN has the least intention to join the contest. But it turns out that he wins. KUEN is envious. SZEMA CHING decides to leave the Ghost Valley. After several encounters with GWAI GUK TSU, she comes to suspect that he is the murderer. But she is overpowered by him. CHING and KIT are attacked GWAI GUK TSU saves them and sends them to LIP-WAN. On his way back to the Ghost Valley, GWAI GUK TSU is attacked by a silver masked man. He falls down the Cliff.
Speculations spread as whether GWAI GUK TSU has died. LI-WAN has plotted with brother PING to grab the chief position of the Ghost Valley. They call a meeting to announce the succession of YING. To prevent objection, they lock up madam KUNG and Master YEUNG. BEN releases the two and in the meeting announces the plot of YING. As YING overpowers BEN, GWAI GUK TSU appears. He has disappeared all this time in order to find out who are the conspirators.
GWAI GUK TSU discovers LIP WAN is the control behind the plot. He duels with him and both get injured. LIP WAN escapes. LIP WAN lies to LI-YIM and makes her believe that GWAI GUK TSU is the bad guy. LI-YIM sets off for the Ghost Valley to avenge for LIP WAN. KUEN is upset that GWAI GUK TSU teaches only BEN the best martial arts. Out of anger, he burns down the library, which stores all the books on martial arts. GWAI GUK TSU is attacked by LI-YIM. He explains to her about LIP WAN's wickedness, she is unconvinced.
HEUNG is jealous that BEN has turned all his attention towards LI-YIM. LI-YIM escapes with the help of BEN. She throws her doubts at LIP WAN and is convinced by him of his integrity. LIP WAN masks himself and secretly teaches KUEN martial arts skills. KUEN injures BEN in a contest. As he is about to leave the Ghost Valley, he is made to confess for killing TIN KAP. GWAI GUK TSU puts him in prison, hoping that he would repent for his wrongs. BEN gets the help of CHING and release KUEN. GWAI GUK TSU discovers it and orders master Yeung and madam Kung to get him back.
KUEN kills madam Kung and escapes the pursuit of master Yeung. BEN is in deep remorse and becomes sick. HEUNG knows that BEN misses LI-YIM. She visits her and begs her to see BEN. LI-YIM agrees. She intends to use this chance to kill GWAI GUK TSU. BEN tries to stop her but she is ruthless. HEUNG gets wounded by LI-YIM in order to save BEN. BEN finally secures the book 'The Art of War' through HEUNG, who dies shortly because of the injuries.
KUEN is saved for Master Yeung's pursuit because of LIP WAN's help. He decides to join LIP's murder squad. LI-YIM finally gets to know the wickedness of LIP WAN. But she is poisoned. She seeks help from GWAI GUK TSU, who promises to drive the poison out from her. KUEN comes to the service of Emperor Ngai. He soon becomes the General. The Emperor wants to invite the service of BEN. KUEN has no other way but to obey.
BEN accepts Ngai's offer. KUEN declares his affection towards CHING but is refused. LIP WAN wants to grab the military book from BEN. KUEN suggests using his friendship with BEN to get the book. BEN wins high regards from the Emperor. KUEN is jealous. CHING pours out her heart towards BEN and misbelieves that he has same affection towards her.
KIT is killed by KUEN and LIP WAN for learning their secrets. She is made into a vampire killer and asked to attack CHING. LIP WAN has CHING arrested. He makes use of some love medicine which draws BEN and CHING intimately towards each other. He arranges to have KUEN witness the scene, so that KUEN would proceed at once in killing BEN and getting the book from him. BEN has to return to Chai as he learns that LI-YIM has become sick. KUEN uses this chance to frame him as a political spy from Chai.
Emperor Ngai decides to execute BEN. But KUEN dissuades him from killing BEN until KUEN secures the military book from him. BEN refuses to yield the book. Ngai orders to have his legs cut. GWAI GUK TSU succeeds in driving out the poison from LI-YIM. When he learns that BEN is imprisoned, he orders a secret message to be passed on to BEN.
LI-YIM and the others reach Ngai and are pursued by KUEN's men. LI-YIM falls into the trap of LIP WAN and is hypnotised into becoming his killer. BEN finally gets the message from GWAI GUK TSU asking him to pretend to be mad. He inflicts pains upon himself and convinces KUEN of his madness. CHING feels deep hatred-for what KUEN has done. She attempts to kill him but fails.
SZEMA PING suddenly appears again. He actually is the prince of Tsui. His ambition is to swallow Ngai. He conspires with KUEN to seize the military power of Emperor Ngai. LIP WAN feels that he is left out in the `plot. On the wedding day of KUEN and CHING, he orders LI-YIM to attack KUEN. SZEMA PING overpowers LI-YIM. At this point, BEN is rescued by GWAI GUK TSU. They are pursued BY KUEN, and is rescued by the Emperor Chai. PING uses LI-YIM to attack LIP WAN. LIP WAN is seriously injured.
GWAI GUK TSU tries to drive the spell cast on LI-YIM. But she escapes. She is instructed by PING to kill LIP WAN. Both die in the duel. BEN finally agrees to come to the service of Emperor Chai. He confronts KUEN in a battle and kills him. He resigns his service and leads a hermit's life in the Ghost Valley with SZEMA CHING.
