Shing Lung (Jackie Chan) is a youngster, living in a remote village with his grandfather, kung fu master Chen Peng-fei (James Tien). Lung does not take his training seriously enough, he gambles, and he gets into fights which lead him to display the skills his grandfather has told him he must keep secret.
Lung briefly finds employment selling coffins, working for an unscrupulous proprietor (Dean Shek), who even stoops to selling second-hand coffins. Lung is fired when he accidentally traps his boss in one of the coffins. After making his escape, he runs into three thugs he'd beaten up earlier, who ask him to teach them kung fu. Lung meets their sifu, Ti Cha (Lee Kwan), the unskilled leader of the Everything Clan. Master Ti offers Lung a lucrative job training his students and fighting against the top fighters from rival schools. This boosts the reputation of the school and of the scheming Master Ti. However, Lung makes the mistake of naming the school under the Sien Yi clan name. This comes to the attention of evil kung fu master Yen Ting Hua (Yam Sai-kwoon), who finds and kills Lung's grandfather. But, Lung eventually takes revenge for his grandfather's murder after undergoing rigorous training from The Unicorn (Chan Wai-Lau).