Grand Mater Longevity of the Omei Sect leads his disciples, Xuan Dan, to battle Insomnia and his evil sorcerers. The deadly duel causes destruction and chaos on an immense scale.

In the midst of the battle Dan's careless mistake lets Insomnia escape into the Chin-Yu Lair. Dan is then ordered to guard the lair looking out for Insomnia's next move.

Meanwhile, Grand Master Longevity decides to go to the enlightened world seeking greater power to subdue Insomnia. He reveals that only the combined power of the scared Violet and Sapphire swords and the unity of the swordsmen can defeat the force of evil. The Master then entrusts Dan with overlooking the Omei Sect and guarding "Distant Brilliance", the magical flame that will take him back to the material world.

Zhang and Ying , learning to maneuver the combined power of the Violet and the Sapphire swords but to avail. Xuan knows this is because the two can't free themselves from earthly desires. Xuan himself is secretly in love with Ying, but he puts his own feeling aside for the battle against evil.

Xuan tries to help Zhang and Ying to attain enlightenment. Instead Zhang uses his magic power and creates and altered ego, Lian who is unskilled in material arts and combative. This unexpected outcome meant the training has to start over. It now seems doubtful that anyone will learn to maneuver the Violet and the Sapphire swords in time...

Over at the Chih-Yu Lair, Dan befriends Amnesia out of the two quickly fall in love. In comparison, Xuan and Ying have to sacrifice their affections for each other for the training. But as times goes by love slowly forges between the two.

Xuan, desperately seeking a breakthrough in his training, swallows Master Longevity's "Distant Brilliance" and is on the verge of losing his conscience. As other swordsmen fail to find a cure, it is Ying who saves Xuan in the critical moment. The incident furthers the two's relationship.

Dan comes to Amnesia's rescue when her enemies are hunting her down. As Amnesia dies from her wounds, Dan draws her blood and spirit into his own body hoping to possess her eternally. Turns out Amnesia are Insomnia scheme to gain control of Dan's mind. Insomnia subsequently orders the swordsmen to steal the Voilet and the Sapphire swords from the Omei Sect.