On the docks, Chinese immigrants are brought to a warehouse by armed guards. Jim West arrives and watches from hiding and one of the workers is Artie in disguise. The woman in charge, May Li, realizes there is an extra worker and all the approved ones have a tattoo. Artie has one as well but she's not convinced and orders her guards to kill all of them with a Gatling gun. Jim dives into the water with Artie.
Back at the Wanderer, the guys discuss the fact that the organization is the Order of the Crimson Dragons and they're smuggling opium, but coolies are also disappearing. There's a rival tong, the Stalking Tigers, and Jim suggests Artie go undercover as an arms dealer. They have a package waiting for them and open it to find a Chinese box holding a fortune cookie. The cookie has a message saying to go to the House of Delights. It's a restaurant, and Jim goes there using the fortune cookie message as a password. The hostess pleads ignorance and tells Jim she will send someone. As Jim waits, a Tong man comes out and throws a hatchet at him. Jim catches it and follows the man into an underground passageway. The man falls into a spiked pit and a wall advances pushing Jim toward the pit.
Jim pries rocks out of the wall to slow it down, then uses a grappling line in his cane to rig a line across. He then pulls the man to safety but they fall through a trapdoor into the water below. The man, Mo Ti, apologizes most profusely for failing to assassinate Jim and explains that the tong has shunned him and he was hired by an independent contractor working for an evil Englishman. Mo Ti insists Jim is responsible for him because he saved his life. Jim is not thrilled.
Back at the Wanderer, Artie has donned another disguise when a Chinese man, Quong Chu, arrives with a message for Jim. He lets in another huge man and Artie tosses him a billiard ball with tear gas, but before Artie can take advantage of it, Quong Chu paralyzes him with a dart
Jim and Mo Ti find the contractor dead, but they're greeted by Wang Chung, a crime lord and former governor of the province where the Order of the Crimson Dragons originated. Wang Chung is now a member of the Order of the Stalking Tigers. The royal throne is now up for grabs and Wang Chung warns that a Col. Allenby-Smythe prepares to take the Emperor's throne. Princess Ching Ling is the true successor and Allenby-Smythe prepares to use her as a figurehead, while raising money with opium sales. Wang Chung wants to put Ching Ling on a ship to China and wants Jim to escort her. When Jim refuses, Wang Chung reveals they have Artie strapped to a table with a knife rigged to plunge into his heart at midnight.
Jim agrees and goes to an opium house where Quong Chu is waiting to turn over the princess. While he waits, Allenby-Smythe arrives with his Crimson Dragon tong members. He demands the princess and Quong Chu refuses to fight him. He turns the princess over to Allenby-Smythe but Jim takes the colonel hostage. Quong Chu paralyzes Jim with a dart and Allenby-Smythe leaves, sending the princess to May Li before going after the Stalking Tigers. He goes to their headquarters and finds the still-disguised Artie in the death trap. Artie passes himself off as an arm dealer betrayed by the Tigers but Allenby-Smythe isn't buying. May Li arrives to reveal Quong Chu gave them an imposter.
Jim recovers and Quong Chu explains their deception: one of the elderly opium smugglers is Ching Ling in disguise. The grateful princess gives him a kiss for trying to save her life but they have to get to the boat. They find Allenby-Smythe outside and Jim gets them into a nearby office, where they kiss again. Ching Ling isn't enthused about her destiny and they kiss again, but are interrupted when Mo Ti laughs. He reveals he has a way out for them: in a dragon costume as part of a street parade. They slip away into an alleyway, only to be grabbed by May Li and her men. Mo Ti reveals he is working for the Dragons.
Jim and Ching Ling are taken back to the Hidden Delights Restaurant where Allenby-Smythe reveals his ally; Artie, accompanied by a bevy of attractive women. The tong men hold Jim down and Allenby-Smythe asks Artie to dispose of Jim. Artie raises the sword, and Ching Ling asks him to stop. Artie takes advantage of the distraction to suggest he might try to "persuade" him to join with them. First he suggests they show Jim their preparations and Allenby-Smythe agrees. He takes Jim down to the basement where he has his weapons ready to ship to his flagship that he'll use to conquer China.
Jim isn't impressed so Allenby-Smythe has him tossed into a steam pit, and when the tide comes in, he'll be boiled to death. Allenby-Smythe tosses Artie in as well: the ever-apologetic Mo Ti admits he revealed who Artie was. Jim uses acid pellets to burn through the trap door and they get out in time. They take out the guards and don their uniforms: Artie goes after the princess while Jim sets a time fuse in the munitions room.
Jim sets the fuse but the Dragon tong men spot him and attack. Jim fights his way clear but Allenby-Smythe arrives and opens fire. Jim runs through the passageway back to the spike pit where Allenby-Smythe corners him. However, the time fuse goes off and Jim uses the distraction to throw Allenby-Smythe into the pit, killing him.
Jim links up with Artie and Ching Ling and, since the boat has already sailed and Allenby-Smythe is dead, Jim suggests they show her a night on the town. She even has a handmaiden to accompany Artie. The princess wants to go to an Italian restaurant.