The Tree Demon's seal, as cast by the monk Yin (Wu Ma) in the original film, only lasts for 100 years.

Fast forward 100 years later, two Buddhist monks master Bai Yun and his inept disciple Shi Fang are transporting a golden statue of Buddha.

When talking to a merchant, Yin accidentally cuts the roof off Shi fang’s backpack revealing the golden Buddha statue.

While meditating, the monks hear the commotion and master Bai Yun goes to investigate telling Shi fang to stay in the temple.

Lotus tries to seduce him many times the first night, but after he finds out she is a ghost she attempts to kill him on orders from the tree demon but he saves himself by reciting mantras repelling her.

When the Tree Demon attempts to take Shi Fang, the master intervenes and uses his staff to transport his disciple to safety.

Master Bai Yun then casts a spell on Shi Fang and covers his body with his own blood, which has taken on a golden colour because of his accumulated spiritual energy.