Flying Swords of Dragon Gate picks up three years after the infamous Dragon Inn was burnt down in the desert when its innkeeper Jade vanished. A new gang of marauders had taken over – innkeepers by day and treasure hunters by night. The inn is the rumoured location of a lost city buried under the desert, and its hidden treasure would only be revealed by a gigantic storm every 60 years. The gang used the inn as a front to locate the lost treasure.

Falsely accused for cheating in a martial arts competition, two boyhood friends are banished from their Shaolin Temple and go their separate ways. As adults, they join opposing sides in a civil war. When one betrays the other, they settle their differences mano-a-mano.