A struggling teacher is bullied by kung fu students, then dumped by his own students. Meanwhile, an odd man in a coolie hat comes to town, pretending to be a trade delegate for tea and salt. But he's really the murderous Ah Yen, who ten years ago wiped out many residents of Red Clay Village, and his favourite trick is to play the flute whilst kung fu fighting. Through a process which is not made very clear, the struggling teacher gains fu skills which include strokes based on writing. Finally, he is the only one left standing to fight the villain.
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