Encounters of the Spooky Kind

Bold Cheung experiences a frightening dream in which two ghosts, an elder and a young man, torment him. He narrowly escapes their pursuit, but the phantoms keep closing in on him, hinting at a looming supernatural threat.

Cheung accepts the dare to spend the night in an abandoned house and peel an apple in front of a mirror. His friend pranks him, but a real ghost appears and snatches Cheung's friend away. Cheung fights back, cutting the ghost's hand and shattering the mirror as the house starts to collapse around them.

The following day, Cheung hears a tavern tale about a promiscuous wife from a sweet tofu seller. He goes to his own home to check on his wife and finds two peeping toms outside. He scolds them, alerting his wife and Master Tam, who overhear the confrontation; Tam escapes but leaves his shoe behind. Cheung retrieves the shoe and confronts his wife, who triggers guilt and turmoil.

Master Tam worries Cheung will uncover the affair, so he hires the Mao Shan witch Chin Hoi to get rid of him. Chin mentions this to his junior disciple, Priest Tsui, who objects, arguing that harming others breaks their sect's rules and is subsequently expelled.

Cheung is tricked into spending the night in a temple. Tsui instructs him to sleep on the roof, where a coffin opens and a jiangshi hunts him. Cheung endures until sunrise; Chin gives up the pursuit as the sun arrives.

On a second night in the temple, Tsui tells Cheung to collect fifty chicken eggs to throw into the coffin; if he runs out, he must use dog blood. The egg seller sneaks in ten duck eggs, tilting the ritual. When Cheung throws the eggs, the duck egg triggers the corpse to escape, forcing Cheung to resort to dog blood to seal it again.

Back in town, an Inspector arrests Cheung for murdering his wife in a setup. Cheung feigns illness to escape prison and flees into the forest, where a coffin-bound jiangshi comes to life and mirrors his actions. The jiangshi chases him until it collapses onto the Inspector, buying Cheung a chance to slip away.

Cheung reunites with Tsui, who wishes to take him as a disciple. The Inspector and Chin arrive; Chin manipulates Cheung's right arm to attack bystanders, but Tsui stops him in a sword fight. Chin escapes, and Tsui uses magic to turn some of the Inspector's men against the Inspector so Cheung and Tsui can flee.

Tsui conducts a ritual at an abandoned Taoist altar, drawing talismans onto Cheung's body and giving him a protective undergarment. The ceremony marks Cheung's ascent as Tsui's disciple and bonds their fates.

Chin dispatches a vampire to harass Tsui and Cheung, but they defeat it. Tsui uses magic to force the corpse to reveal Chin's location, and they set out to Tam's house to confront Chin.

At the Tam residence, each sorcerer imbues his disciple with spirits: Cheung is possessed by the Monkey God and Chin’s disciple by the Dragon Taming Arhat. The two possessed disciples clash in combat, and Cheung emerges victorious.

Chin forces Master Tam to be possessed by the spirit of Lu Dong Bin, while Cheung, possessed by Hong Hai Er, kills Tam. The sorcerers unleash their magic on each other; Tsui is grievously wounded as Chin's sorcery persists because Tsui gave his magic undergarment to Cheung. Cheung then destroys Chin's altar legs, throwing Chin off balance.

With Chin unbalanced, Tsui strikes Chin with magical fire, setting Chin ablaze. Chin dies, and Tsui dies soon after from the magical backlash. The duel ends with both sorcerers defeated, leaving Cheung exposed to the aftermath.

In the midst of the madness, Cheung's wife steps forward and tries to manipulate him into believing Tam was about to rape her. Cheung sees through the deceit and brutally punches her, then hurls her aside, ending the confrontation.