On the journey home, Zhuo Yihang passes by Mount Hua, where he meets a beautiful young maiden and falls in love with her. The following night, Zhuo joins some martial artists in a duel against the Jade Rakshasa. However, he is shocked when he sees that the woman he met earlier is actually the Jade Rakshasa, Lian Nichang. He makes another startling discovery that the martial artists he is helping are actually spies working for the Manchus. Zhuo Yihang switches sides and helps Lian Nichang defeat the spies. They meet a formidable swordsman, Yue Mingke, who is serving as a military attaché under the general Xiong Tingbi. After a duel, Yue Mingke and Lian Nichang realise that their respective masters used to be a loving couple, but have separated due to a rivalry over achieving supremacy in swordplay.