Pan Yu Ling succeeds her brother Pan Guang Yin as leader of the Qing Bang which has defeated the Hong Hua Hui. However the Japanese army has apparently hired martial artists to catch Kenshiro Kasumi (Yan Wang). Kitaoji has hired Death Bird Demon (Liu Fei Yan) to guard a shipment to Harbin. In the desert, Liu Fei Yan is seen transporting a young girl, Erika, by camel. They arrive in Harbin where he hands over 3 books protected from the German army and the girl. However, they are betrayed and the books and Erika are abducted, but Liu Fei Yan saves her and takes them to Shanghai. On his way to pick up the books and meet Kitaoji, Charles de Guise is intercepted by a Hokuto user who kills him. Both Liu Fei Yan and Kenshiro run to his aid and think the other is responsible for his death and attack each other.

Kenshiro and Liu Fei Yan (Death Bird Demon) attack each other on a small boat, but both come to realize that the other may not be de Guise’s killer. Suddenly Yu Ling divides them and reveals that she knows that the List of Hope and Erika were entrusted to him, and that German troops are waiting for them on the bridge ahead. She tells them that the books are a list of 2,000 works of art and their locations belonging to people persecuted by the Germans. The Gemans begin searching for them, and encounter a French troop and they open fire on each other. In a flashback, de Guise is shown fighting the unknown assailant before he is killed, and witnessed by Kitaoji. Liu Fei Yan recalls how Erika's family were killed before he arrived to pick up the List of Hope and found them dead or dying and took Erika and the books with him.

Liu Fei Yan seeks to protect Erika, but is ill himself. Meanwhile a Japanese military office is assassinated near the airport and Kitaoji tells Kenshiro that the Japanese will march on Shanghai in response, and that a world war is likely to break out. Liu Fei Yan delivers Erika to Yu Ling for safety before he goes to fight Kenshiro, claiming is his destiny and telling her that the List of Hope is memorized inside Erika's head, not written in the books. Liu Fei Yan goes to the "Great New World" to challenge Kenshiro, who arrives to accept the challenge. Liu Fei Yan attacks with his "One Thousand Hands", but after an initial exchange of blows, Kenshiro understands Liu Fei Yan's attacks and manages to strike a winning blow. Defeated, Liu Fei Yan asks Kenshiro to kill him, but he refuses, and Liu Fei Yan prepares to kill himself with his own fingers. Erika calls out that she needs Fei Yan and he softens, telling her that he has little time left. Kenshiro realizes that Fei Yan has been nursing a fatal illness. Meanwhile de Guise's killer has been watching these events from a rooftop nearby.

Liu Fei Yan is installed in a church as a priest where he will care for Erika. Meanwhile Ye receives information that Guise’s killer uses the West Dipper Lunar Fist. Kenshiro tells the story of years ago when he came across a temple inhabited by a white wolf which was the tomb of the Yuezhi. It was the embodiment of the hatred at being destroyed by Shuken to create the Divine Fist of the North Star. Kenshiro defeated the wolf, but it foretold that its descendant would appear in the future. Later, on his way home Liu Fei Yan is ambushed and attacked by Guise's killer and the man they are seeking, Yasaka of West Dipper Lunar Fist.

Yasaka holds Liu Fei Yan prisoner under the authority of the Japanese army. However, he then reveals that it was for his own purpose of revenge and he begins to torture Fei Yan with steel spikes. The Japanese begin a bombing raid on Shanghai to destroy the Green Gang (Qing Bang Gang) and Pan Guang Yin is killed protecting Zi Ying. Meanwhile, the swallow from the church finds Liu Fei Yan, picks up his necklace and flies back to Erika and the others with it. Yasaka frees Fei Yan so he can test him in a contest of techniques and also learn how to combat the Hokuto Shinken technique. After both fighters suffer injuries from each other's blows, Yasaka finally attacks with the West Dipper Lunar Fist and defeats Fei Yan.

Kenshiro commandeers a Japanese tank to reach Liu Fei Yan. Meanwhile the swallow returns to Fei Yan, and just as Yasaka is about to deliver the death blow the swallow distracts him. As Yasaka kills the bird, Fei Yan stabs his fingers into Yasaka's leg. Suddenly Kenshiro arrives in the tank to confront Yasaka. He calls Yasaka's desire for revenge for a 2,000 year old grudge against the North Star just a complaint. However before they can fight, they are interrupted by Japanese troops and both withdraw, with Kenshiro taking the badly injured Fei Yan. Not wanting Erika to see him die, Fei Yan asks Kenshiro to let him float downriver in a small boat. Following Fei Yan's wishes Kenshiro tells Erika that he has gone away on a journey although she doesn't believe him, just as the fledgeling swallows leave their nest.

Kenshiro decides to follow Yasaka to Ningbo, location of the North Star family temple. Tian Xue-Fang is also there and witnesses Yasaka eliminate a group of followers of the North Star style. Kenshiro finds Yasaka and shows him a gem containing the souls of the North Star which reveal to Yasaka the story of Shuken and Yama, and the fact that he is the descendant of their child. Yasaka comes to the realization that the hatred against the North Star that he had been carrying all his life was misguided. Following Yasaka's revelation, Kenshiro then offers to fight him.

Yasaka and Kenshiro begin their battle, while Pan Yu Ling tries to take Erika to safety from the Germans seeking the Book of Hope. They are attacked by German troops, and although Yu Ling shoots the soldiers, their commander gets the drop on her. However, Kenshiro's younger brother Ramon intervenes and knocks out the commander, saving Yu Ling and Erika. Meanwhile Yasaka and Kenshiro continue their battle, and Yasaka unleashes his ultimate technique. Kenshiro defeats Yasaka, but refuses to kill him, and then gives him the jewel containing the soul of the North Star to accompany Yahma's soul residing in his own West Dipper jewel. Yasaka also wants to apologise to Erika for killing Fei Yan and they return together. Elsewhere, a group of fighters wearing the symbol of twin snakes and dedicated to Migado Migadol, declare that the world of the North Star will end soon.

Yasaka reveals that Guise was most likely killed by someone using the Heaven Dipper Sacred Yin Fist and not him because of the burn marks on his body. At the port, Tian Xue-Fang decides to wait for the army to dispose of Yan Wang and the Qing Ban. Later, a man with a twin snakes tattoo on his neck delivers new high-powered weapons to the 98th Division of the Japanese army. At Liu Fei Yan's funeral Yasaka offers Erika a gun to kill him in retaliation for the death of Fei Yan, but she refuses. She reveals that the North Star jewel he holds was a secret treasure of the Nahash people. It is listed in the Book of Hope and wanted by the Germans. Yasaka tells the Qing Ban group about the Nahash who created the Heaven Dipper Sacred Yin Fist which killed Fei Yan and should have died out with them. As the Qing Ban group are being observed by descendants of the Nahash, Simeon and Himuka, they are suddenly attacked by Japanese troops.

Ramon swears to protect Erika as he leads her into the lane ways to escape from the Japanese soldiers and a German officer. Elsewhere, Pan Yu Ling is also pursued, but when she is cornered, Kenshiro arrives and takes care of the Japanese soldiers. Meanwhile Ramon decoys the German officer by wearing Erika,s blue coat. He is caught and fights back, he is no match for the officer. Tian Xue-Fang watches the events unfolding and is seen by Ye who doesn't recognize him, so he pretends to be his own brother, Tian Xue-Yun. Simeon and Himuka appear and reveal that the German officer is in fact their agent Shamura who takes Ramon captive. Tian Xue-Fang then encounters a robed woman with pole cross tattoo, searching for Liu Fei Yan and claiming that he is her brother. Meanwhile, Zi Ying reports Ramon's capture to Kenshiro's group.

Kenshiro heads to a ruined temple near the west gate to save Ramon and meets Shamura. Meanwhile Erika has taken Fei Yan's jewel to exchange for Ramon's freedom, so Yu Ling leaves with Yasaka to find her. Erika frees Ramon but he warns her that Shamura's style steals the power of his opponent, something that Kenshiro begins to realize as they fight. However, Kenshiro overcomes Shamura's increased power and then kills him by striking the seven pressure points of death. Meanwhile, as Erika negotiates with Simeon for the release of Ramon, Kenshiro arrives and he and Simeon face off against each other.

Kenshiro and Simeon trade insults, and after the first attack, Kenshiro realizes that Simeon killed Guise. Meanwhile, the young woman claiming to be Fei Yan's sister agrees to work with Tian Xue-Fang to find Kenshiro. Kenshiro and Simeon commence their battle, but they are soon interrupted by shelling from Japanese tanks. Simeon leaves, saying that the Nahash prophesy will be fulfilled. As Yu Ling, Yasaka, Kenshiro, Ramon and Erika try to regroup and evacuate the area, the shelling increases. Back at the Japanese army headquarters, the Qing Ban leaders are reported missing and unlikely to have survived the bombing. Elsewhere, the Nahash leaders agree that their plans for re-creation and development of a new world of Genesis is under way.