Plot
In Republican-era China, Master Kau makes a living as a Taoist priest who performs magic that maintains control over spirits and irrepressible vampires. Together with his inept students, Man-choi and Chau-sang, he resides in a large house protected from the spiritual world with talismans and amulets.
One day, he accepts an assignment from a wealthy businessman, Yam, to remove Yam's deceased father from his grave and rebury him, with the hopes that doing so will bring more prosperity to the Yam family. However, during the raising of the coffin, Kau notices the body, instead of in a decomposed state, is still intact. Knowing it has become a vampire, he has it moved to his house for further study.
Once in the house, Choi and Sang line the coffin with enchanted ink to safeguard the body, but forget to line the bottom of the coffin, causing the vampire to break out. It heads straight for Yam's home and savagely kills his son before going into hiding by dawn.
Wai, an incompetent police inspector who is smitten with Yam's daughter Ting, blames Kau for murdering Yam and arrests him. Kau is imprisoned and Yam's body is placed in a makeshift morgue near the jailhouse. Choi stays at Yam's house to protect Ting while Sang frees his master, only to witness Yam reawakening as a vampire. Kau and Sang manage to kill it after engaging it in battle. Wai realizes his mistake in framing Kau earlier and accepts the fact that another vampire is on the loose.
The vampire again invades Yam's house. Kau and Sang arrive in time to wound it and forcing it to flee, but not before it critically wounds Choi. Kau invites Ting to stay at his house for safety. The next morning, after examining Choi's wounds, Kau claims he too may become a vampire. He orders Sang to feed Choi glutinous rice, claiming it may decrease the vampire's venom in Choi's body and bring him back to his normal state. While purchasing the rice, however, the shady merchant deliberately mixes different kinds of rice in the bag, and an unwitting Sang accepts it. Before Sang can get home, he is lured by a mysterious woman into her house. He soon deduces she is a spirit, but she uses her supernatural power to seduce him. They sleep together for the night.
When Sang returns to Kau's house, the priest is quick to notice his student's predicament. That night, he silently follows Sang to the spirit's house. The spirit transforms into a hideous ghoul and attempts to kill Kau, but fails at the hands of his talismans. She bewitches Sang to turn on his master, but after a brief fight, Kau breaks the spell and she escapes.
The next night, Kau ties Sang to a chair and prepares to capture and eliminate the spirit. Sure enough, she arrives at their house and Kau chases her throughout. As Sang tries to free himself, Choi turns into a vampire and attacks him. Amidst the chaos, Kau restrains Choi and almost terminates the spirit, but stops when Sang begs him to let her go. Saddened she can no longer be with Sang, the spirit flies away.
Over the next few days, Kau restores Choi's health and turns him back to human. Wai brings in news that the vampire is now active again. When Kau leaves to investigate, the vampire, now in an almost demonic form, invades Kau's place. After pushing Choi off a balcony, it turns its attention to Ting and Wai, but Kau and Sang again divert its attention. Finally, Kau's fellow Taoist priest, Four Eyes, shows up by coincidence, and they manage to destroy the vampire by burning it alive.
