After 16 years in prison, Igor and his gang are out and bent on taking revenge on the town that sent them up.

Luke and his friend Rodan take a break from the city streets to train in kung fu in China. Whilst there, Rodan steals an ancient amulet which prevents an evil spirit from leaving his tomb. The evil spirit, now free, possesses somebody and follows the pair back to New York City, where it lurks in the subways, killing and mutilating its victims. Can kung fu master Luke right Rodan's wrong and put a stop to the killings?