Rumours of a secret armoury start to resurface, causing the people to begin their hunt for the treasure; Zi Shu and Gu Xiang get into a fight.

Zishu gets suspicious of Kexing's real identity and decides to tail him; the Ghost Valley attacks on Mirror Lake sect, killing everyone and torturing the Chief and his sons.

Shen Shen, leader of the Mount Dagu sect, arrives at Mirror Lake and gets furious after discovering that his brother's family is dead. He enlists the beggar gang's help to look for Chengling.

Chengling, Zhou Xu and Kexing get into a fight with the beggar gang; Gu Xiang goes to the Lovelace in order to pass an order from her master; Qin Song attempts to lure Chengling into the woods, but Zhou Xu saves him in the nick of time.

Laizi and Shen Shen get into a heated argument, but Zhao Jing arrives in time to diffuse the argument; Laizi, along with his two disciples, is killed by the Happy Ghost of the Ghost Valley.

Zhou Xu manages to fend off the attackers but gets injured. Lao Wen helps him heal his wounds and tries to uncover his disguise; Zhao Jing and Shen Shen travel to Yueyang to meet Gao Chong.