In a crowded Hong Kong teahouse, Royal Hong Kong Police inspector Insp. 'Tequila' Yuen, Chow Yun-Fat and Benny Mak surveil a group of gun smugglers as they close in on a deal. When a rival gang ambushes the exchange, a brutal shootout erupts; the gangsters are defeated, but several police officers and civilians are wounded, and Benny is killed. In a moment of vengeance, Tequila executes the gangster who killed Benny rather than arrest him, drawing a sharp rebuke from Chief Superintendent Pang, Philip Chan, who needed that killer as a key witness. After the police funeral, Pang burns the personnel file of another smuggler Tequila had killed, revealing that the man was an undercover cop.
Meanwhile, Alan, an assassin working for Triad boss "Uncle" Hoi, murders a subordinate who had double-crossed them for a rival syndicate led by Johnny Wong, Anthony Wong. Wong is intent on overtaking the old Triad powers by controlling the arms trade and is impressed enough to recruit Alan. Alan reluctantly agrees and is taken to a raid on Hoi's warehouse as part of his initiation, where many of Hoi's men are killed. Surrounded, Hoi lets Alan kill him to spare his remaining men, but Alan proceeds to kill them all anyway to please Wong. Tequila, watching from cover, ambushes Wong's men but is captured by Alan, who spares him.
Tequila confronts Pang, demanding to know if Alan is an undercover cop. Pang refuses to reveal the truth but warns Tequila by recounting the teahouse's fatal friendly-fire incident and advising him to stay away from the case.
Tequila tracks Alan to his sailboat and deduces that Alan is undercover, yet they are ambushed by the remnants of Hoi's gang. The two fight off the attackers, and Tequila escapes just before Wong arrives, allowing Alan to maintain his cover. Wong also discovers that his lieutenant, Foxy, Stephen Tung, is a police informant. Wong's henchman, Mad Dog, beats Foxy before Alan is ordered to execute him with a shot to the chest; however, Foxy manages to place a cigar lighter in his chest pocket, which saves his life. Foxy later locates Tequila at a jazz bar and informs him that Wong's armory is hidden in a vault beneath Maple Hospital.
As Tequila escorts Foxy toward the hospital, Wong learns Foxy is alive and dispatches Alan to kill him while also discreetly sending Mad Dog to keep an eye on Alan. At the hospital, Alan confronts Tequila, seeking the vault’s location; while they are distracted, Mad Dog kills Foxy.
Alan and Tequila finally uncover Wong's vault and wage a brief skirmish with Mad Dog. Pang, Teresa Chang [Teresa Mo], and the hospital staff evacuate the building, while Wong and his men take staff and patients hostage, slaughtering fleeing people from the lobby and maternity wing. Mad Dog is irritated by Wong's brutal impatience, which deepens the tension between the pair. Alan and Tequila join forces to free hostages and fight their way through the armed attackers; the Special Duties Unit, led by Pang and aided by [Teresa Mo], rescues the babies trapped in the maternity ward. During the chaos, Alan accidentally shoots a plainclothes officer and is overwhelmed by guilt. Tequila comforts him by sharing a parallel moment from the teahouse and urges him to persevere.
The confrontation with Mad Dog grows more desperate. Tequila leaves to help Chang rescue one last baby, while Alan and Mad Dog face off in a tense duel that ends with the two allies and enemies separated by a line of crippled patients. They grant the patients safe passage to leave, but Wong bursts in and guns the civilians down as he seeks to kill Alan. Alan escapes, and Mad Dog, furious that Wong’s plan is failing, tries to shoot him but is killed when Wong’s pistol runs dry. The final stand unfolds as Alan and Tequila kill the remaining henchmen and confront Wong.
Wong detonates bombs in the hospital’s armory, trapping Tequila and forcing him to flee with the baby. Alan pursues Wong outside, where he is forced to fight while Tequila tries to survive. At gunpoint, Wong drags Alan and makes Tequila humiliate himself, using the moment as a distraction. In the end, Alan wrestles for Wong’s pistol and shoots himself in the chest, a move that startles Wong enough for Tequila to shoot Wong in the head. The hospital erupts in flames as Alan collapses.
In the aftermath, Alan is revealed to have survived. To protect him from the Triads, Pang and Tequila destroy his personnel file and declare him dead, enabling him to leave Hong Kong and start a new life elsewhere.
