The film opens with Bold Cheung, Sammo Hung Kam-Bo, experiencing a nightmare in which two ghosts — an elder and a young adult — haunt him, first trapped in a wine jar and then appearing as living figures. He narrowly escapes, yet the spectral duo relentlessly pursues him through the days that follow.
Cheung accepts a chilling dare: to spend the night in an abandoned house and peel an apple in front of a mirror without letting the skin break, for breaking it would invite misfortune. True to his reputation as the boldest, he takes on the challenge. During the night, a prank by a friend collides with danger when a real ghost appears, snatching Cheung’s companion. The ghost reaches for Cheung, who fights back, severing the creature’s hand and then shattering the mirror, triggering the house to collapse around them.
The morning after, Cheung overhears a tale about a promiscuous wife told by a benevolent tofu seller who admits that a similar misfortune once befell him and his wife. He travels to his home to check on his wife and finds two peeping toms lurking outside. He scolds them, drawing the attention of his wife and Master Tam, who hear the commotion. Tam escapes but leaves behind a shoe that Cheung picks up to confront his wife, who throws a tantrum and makes Cheung feel guilty for the alleged betrayal.
Master Tam grows anxious at the thought that Cheung might uncover the affair, so he enlists Chin Hoi, the Mao Shan witch, to remove Cheung from the picture. Chin Hoi, Peter Chan Lung, tells this to his junior disciple Priest Tsui, Paul Chung Fat, who instantly takes offense and is cast out for defying the rules of their sect. Cheung is lured into spending a night in a temple, where Tsui advises him to sleep on the roof. A coffin in the temple opens, and a jiangshi, a hopping corpse, stalks the area, but Cheung remains safe. Chin gives up when he cannot locate Cheung, who has managed to evade capture as the sun rises.
A second night in the temple proves even more perilous. Tsui again guides Cheung to survive, this time by collecting fifty chicken eggs to throw into the coffin. If eggs run out, dog’s blood becomes the alternative. The egg seller adds ten duck eggs, complicating the plan. That night, Cheung begins to throw eggs as the coffin opens; the corpse initially yields to the eggs, but when a duck egg is tossed, the zombie escapes, forcing Cheung to pour dog’s blood onto it, which knocks Chin flying into Tam’s roof and breaks the witch’s hold over the jiangshi.
Cheung returns to town, where an Inspector arrests him for murdering his wife, a charge that is clearly a setup. He slips into a forest and hides, but a coffin is discovered, and the corpse within comes to life, mirroring Cheung’s movements. An evil force lashes out, driving the pursued man to flee while the jiangshi collapses onto the Inspector, giving Cheung a moment to escape.
Cheung reunites with Tsui, who seeks to take him as a disciple. As they stop to eat, the Inspector and Chin appear, and Chin manipulates Cheung’s right arm to strike those nearby. Tsui steps in during a sword fight and sends Chin fleeing. To aid Cheung, Tsui uses magic to bend the Inspector’s men to their own battleground, allowing the two to escape.
Tsui officiates Cheung’s initiation as his disciple at an abandoned Taoist altar, drawing talismans on Cheung’s body and providing him with his protective undergarment. Meanwhile Chin sends a vampire after Tsui and Cheung, but they overpower it; Tsui uses magic to coax the corpse to reveal Chin’s hiding place. They push toward Tam’s house to confront Chin.
Both sorcerers unleash their powers, and their disciples are infused with spirits — Cheung with the monkey god and Chin’s apprentice with the Dragon Taming Arhat — prompting a fierce, supernatural duel in which Cheung emerges victorious. Chin then forces Master Tam to host the spirit of Lu Dong Bin, but Cheung, possessed by Hong Hai Er, defeats him. The two sorcerers unleash their full magic on each other, leaving Tsui gravely injured after giving Cheung his protective undergarment. Chin appears to be gaining the upper hand, but Cheung shatters Chin’s altar legs, upsetting the sorcerer’s balance. Tsui seizes the moment to strike with magical fire, and Chin burns to death while Tsui, badly wounded, falls to his own death.
In the chaotic aftermath, Cheung’s wife reappears, attempting to sway him by claiming Tam was about to rape her. Cheung sees through the ruse, rejects the deceit, and responds with a sharp confrontation, ending with him striking her repeatedly and casting her aside, resolute in his judgment of the night’s madness.
