It has been a couple of years since Fu defeated Slash. Fu is now regarded as the protector of the village, defeating bandits and upholding justice. However, with no skills, Fu has to start training to harness the kung fu skills he inherited from the grandmaster. One day, Fu rescues an old injured warrior who turns out to be the evil Zhan. Zhan plans to take over the world of martial arts by acquiring a precious gem from Laun of Huell Clan. Fu fails to save Laun in the martial of fire, and realizes he is just a lucky rabbit who happened to inherit the grandmaster's kung fu. He starts to practice hard with Penny and Becky, and is eventually able to join them in stopping Zhan's evil plan. He finally Zhan by holding the true harmony of the martial of fire.