Four months has passed and Yusuke has finally returned after having an intense training session with Genkai. Keiko meets him on his return and treats him to an ice cream for their reunion. Yusuke, now fully relaxed, talks to Kuwabara and discusses their previous encounters. Just then, Keiko interrupts their conversation and Yusuke quickly makes an excuse by treating her to a movie as they were about to enter the movie house, Yusuke senses something bad, and quickly makes up another excuse for Keiko saying they forgot something and will be back in a moment, and together with Kuwabara, they leave Keiko behind. As the two walk off, suddenly a group of punks attack them, but Yusuke finishes them off by unleashing his newly learned technique from Genkai, the Spirit Shotgun. This display of power even shocks Kuwabara. Then another punk tries to land a sneak attack on the two, but somebody turns in and smacks the punk out and it turns out to be Botan, to Kuwabara's excitement. Botan then explains Yusuke's next mission.
Koenma receives a letter from the Saint Beasts, aka Shiseijū, demanding the Spirit World to allow them to stay in the human world before worse comes to worst. Then Botan explains that the punks that attacked them were possessed by insects that manipulate their mind into doing evil deeds. She tells Yusuke that these insects are controlled by a flute which is being used by the leader of the Sacred Demons, Suzaku. So the only way to stop this mess is to defeat the demons, since the spirit world will not grant their request of being able to stay in the Human World. This serious talk suddenly comes to an end when Botan realizes Kuwabara was listening to them. Now Kuwabara learns about the whole thing, the demons, detectives and the rest, and because they are now best of friends, Kuwabara decides to help. Botan leads them to a secret tunnel that connects the human world to the sacred demons' castle. Without any hesitation, Kuwabara jumps down, forcing Yusuke to follow, but before Yusuke goes Botan gives him a communicator that will enable them to communicate between both worlds. Just then, Yusuke remembers something really horrible - he left Keiko alone at the cinema. As we see a very annoyed Keiko, Yusuke jumps in the tunnel as fast as he could leaving Botan to explain things to his friend.
Kuwabara and Yusuke arrive at the demons' castle only to be greeted by hundreds of zombies. Outnumbered by the monsters, both Yusuke and Kuwabara are knocked down, but just then a strange light blinds the zombies off. We then see two familiar faces, Kurama and Hiei, and they are out to help Yusuke by orders of Koenma in this quest. They quickly get along with each other, as Yusuke introduces Kuwabara to the two. Hiei challenges Yusuke to another showdown once this thing is over, but then Kuwabara breaks in, and seeing how short Hiei is he starts to taunt Hiei, and a little misunderstanding arises as Yusuke breaks up the one-sided brawl (with Hiei using his speed to evade Kuwabara's attacks).
The four warriors now enter the demons' castle only to be greeted by a flying eye monster. The monster pulls a lever and suddenly the ceiling falls down, leaving the four trapped beneath. Now the four are in one hell of a situation they desperately need to break out of Yusuke and the gang are trapped beneath the ceiling and it is about to crush them, as the flying monster watches in awe. Yusuke then convinces Hiei that he must be the one to sneak out and pull the lever that brought the ceiling falling down since he is the fastest of the four, much to Kuwabara's chagrin. So Hiei speeds out and Yusuke doubles his power to compensate for Hiei's disappearance but the ceiling continues to fall down, and is about to crush them in seconds. Hiei reaches the lever and is about to pull it down, but is seemingly tempted by the flying eye monster to leave his comrades behind and conquer the Human World with the sacred demons. The eye monster reveals that the lever was trapped, which causes Hiei to react.
In the blink of an eye, Hiei flies up and slashes the flying eye monster with his sword, and pulls the lever up. He acted like he was persuaded in order to learn of the trap. The four continue on deep within the premises of the castle. The surroundings were extremely quiet, and it was extremely dark. Just then, something beeps. Botan's communicator pops up (giving Kuwabara a shock) and Botan tells Yusuke that so far she has taken care of the insect invasion in the human world and tells them to go on and find the flute to stop this mess.
The four enter a very dark room. Just then someone creeps in, and a rock demon appears right in front of the gang. It turns out to be Genbu, one of the sacred demons that lived in the castle. He challenges everyone and swears to crush them to bits. Kurama steps forward and decides he will face the monster by himself. But unknown to him the rock demon can hide part of his rock body beneath and attack his opponents from behind, and this sneak attack surprises Kurama. However, Kurama has something up his sleeve (or his hair) and unleashes a rose. But then the rose turns into Kurama's patented weapon, the Kagon Retsuzanshi (Rose Whip) and with this it chops Genbu into pieces and down he goes.
Kurama thinks he won the battle but then Genbu's separated body parts start to stick back together and Genbu reforms his body, but this time he's got a new attack, and he hurls his body at Kurama making a rock storm attack, injuring Kurama, but while this attack was unleashed, Kurama sees an odd looking rock from the storm and desperately grabs it while absorbing much of the storm's shock. Kurama goes down, and Genbu starts to reform again for his finishing blow, but then something happens. His body does not reform the way it should. Now his rock parts are all messed up, and Kurama explains that he found his source of energy, the odd looking rock he had grabbed. Then he throws up the odd looking rock and with his rose whip slashes it to pieces, and Genbu disintegrates. With Genbu defeated, Yusuke and the gang proceed further into the castle.
Kurama starts to recover from his wounds, and out of nowhere Kuwabara springs out and begins showing off to the gang how strong he has gotten. He starts to unleash his rei ken (spiritual sword) and, to impress everyone he starts enlarging the sword until it crushes the ceiling. However, nobody was impressed (aside from Koenma, who was shocked) and then Kuwabara faints, exhausted from his display of power. Yusuke calls Botan on his communicator to query about the situation back at the Human World and Botan says that things are getting pretty worse as she gets chased by another possessed person as she smacks him down with her baseball bat. Kuwabara regains consciousness upon seeing Botan then the place suddenly begins to crumble as the gang runs out to the clearing. There they meet the next demon they have to face, Byakko, a tiger-demon. Hiei was about to face the monster but Kuwabara breaks in and tells them that he will beat the monster with his powerful spiritual sword and displays his power again, but even the tiger-demon Byakko laughs at his display of energy. Byakko then summons four mini-tiger demons from his hair and the tiger confronts Kuwabara.
Kuwabara tries to attack the tigers with his sword but they are much too fast for him, as the four tigers attack him and Kuwabara goes down badly wounded. Yusuke begs for Kuwabara to give up the fight and let them handle the situation, but Kuwabara stands up and he refuses to do so. Just then he thinks of a plan, and suddenly runs back to his comrades. Byakko laughs as Kuwabara finally thinking of retreating, as the mini-tigers follow him in a straight line. But Kuwabara's plan is about to begin as he confronts the tigers, who have followed him running and has now lined up in front of him in a straight line, and there he uses his spiritual sword and makes it longer, nailing all four in one straight attack. However, the tigers are much too powerful and they still continue to force their way out of the sword, so Kuwabara decides to give chase once again, but this time he goes round in circles and traps the four tigers around his sword, leaving them stuck for good.
Now Kuwabara confronts the now angry Byakko, and Kuwabara attempts to kick the guts out of the tiger-demon with his sword. He successfully slashes the monster, but Byakko is unaffected by the hit. Kuwabara tries again and again, but Byakko still is unaffected. Kurama then realizes that Byakko absorbs all the energy that Kuwabara gives off with his sword attack and in turn Byakko gets more and more stronger as Kuwabara's energy lessens by the minute. Now we see Kuwabara's sword getting shorter, as he loses his energy continuously. But still as stubborn as he is, he again uses all the strength left from his body and unleashes another spiritual sword, and Byakko again absorbs the energy from it. Now Kuwabara is down and is exhausted from losing all his energy, and Byakko the tiger-demon gets stronger and stronger.
Despite losing all his energy, Kuwabara unleashes his last drop of power and attacks again with his spirit sword, but once again Byakko absorbs the energy, leaving Kuwabara unconscious. Now Byakko is about to smash Kuwabara with his humongous feet, but suddenly he begins to feel something wrong. It seems like what Kuwabara planned before has finally taken effect. Byakko absorbed too much energy for his body to take, and with this Byakko suddenly explodes and he falls to the pit down below to his demise. Kuwabara faints from exhaustion.
Two demons down, and Yusuke and the gang continue on with their journey. Yusuke calls Botan again with his communicator to ask about the situation in the human world, but again Kuwabara springs up and recovers his strength again, and snatches the communicator away and asks Botan for a date. It turns out that things are getting worse as more and more humans are being possessed by the demon insects. Yusuke needs to stop Suzaku, the holder of the flute that controls the insects as soon as possible to prevent more casualties in the Human World. They enter the next venue of challenge, a valley of lava. Hundreds of stepping stones lie ahead but what awaits them below is one sea of burning lava. Kuwabara rips a piece of his shirt and throws it down into the lava, but it burns right before reaching the sea, proving how hot it really is. So they continue on jumping on each stone but suddenly someone arises in front of them, Byakko.
It turns out Byakko survived his fall from the pit and has regained his composure. He challenges again the group to another showdown. As Yusuke attempts to attack, Kuwabara suddenly stops him, saying this is his fight, and what he started must be finished. Bravely, Kuwabara jumps off to face Byakko one more time, but the stone he jumped on suddenly breaks, and a horrified Kuwabara catches his breath on almost falling to his death in the sea of lava. He removes his shirt and prepares for the battle and unleashes his spirit sword one more time. But Byakko has something new to show, and he spits out a devastating fireball at Kuwabara. Kuwabara was about to counter with his sword but Kurama suddenly says he must avoid the attack. He does, and realizes the ball disintegrates anything that touches it. With this, Kuwabara avoids every ball Byakko fires, destroying the stepping stones all over each time. Now there are only two stones left, the stone where Byakko waits, and the stone where a shocked Kuwabara stands.
Yusuke pleas for Kuwabara to retreat since a close range weapon like his sword will never stand a chance against Byakko's fireball attacks. But Kuwabara persists on staying in the battle, and he takes the gamble and jumps off the stone and stands towards Byakko's position to attack him frontally. But his jump fell short and he is racing down the burning pit of lava beneath just then he unleashes a new weapon. His sword transforms into a pole-like gadget and it bounces him back up and into Byakko and with this momentum Kuwabara releases a mighty punch that nails Byakko in the jaw and knocks him out of the stone and down into the lava. However, his punch was too strong causing him to lose control and he fell down as well. The three are in shock on how Kuwabara sacrificed himself to beat Byakko but just then we hear Kuwabara's scream, he didn't fall. He is dangling just below the stone and yells for help. He finally defeated Byakko and they continue on to face the rest of the demons.
The group reaches a room with fifteen doors to choose from. Kurama warns them that they must be aware because only one door leads to the right path, and there are no second attempts to choose another door, and unavoidable traps lie on wrong doors. Kuwabara, having the highest spiritual awareness among them, is chosen by Yusuke to decide which door they should take. He chooses the second door to the left, stating that there is something big behind the door. He opens the door and got scared when he saw a tiny rat. They continue on the path Kuwabara has chosen, and they find themselves in front of a blue door with dragon statues standing on each side. Judging from the statues and the odor, Kurama confirmed that the next Saint Beast they're going to encounter is the blue dragon. Suddenly the door opened by itself and they entered the room which is shrouded by a fog. The next Saint Beast shows himself, and introduces himself as Seiryu, the blue dragon.
Suddenly Seiryu announces that they have another guest, and coming into the room through the door behind them is Byakko, still alive after falling into the sea of lava. He is asking for Seiryu's help, but he ignores his pleas and freezes him with his ice technique and pulverizes him. He further insults him by telling that he is just a weapon, not a friend, and spits on his face. Before Byakko dies, the last tear formed in his eyes, fuelling Yusuke's anger against Seiryu, but Hiei stops him and tells him to save his anger for their leader.
Hiei steps forward, and throws his cloak to cover Byakko's head. Seiryu chuckles a bit, and states that he finds it amusing that Hiei seems to feel sympathy for Byakko. Kurama then tells Yusuke that in times before he has seen Hiei act with similar cruelty, but something about Byakko's death enraged him, and he had never seen Hiei start a fight using such an extraordinary amount of spirit energy.
Before their battle, Seiryu tries to recruit Hiei and join them as a Saint Beast, but he refuses and Seiryu makes the first move, and Hiei draws his sword and deflects his attack with a barrier made of his spirit energy. Seiryu continues his assaults using his ice technique, but Hiei's extraordinary speed allow him to dodge Seiryu's attacks, freezing the room in the process. Eventually, one of Seiryu's attacks managed to freeze Hiei's left leg, thus greatly decreasing his speed. Seiryu then insults him, telling Hiei to beg for mercy as he prepares his next attack. Before Seiryu's next attack could land on him, Hiei thrusts his sword on the ground and plunges into Seiryu, and as the two clash, Hiei's right leg and left arm are frozen, while Seiryu seems to have the upper hand and appears to be unscathed, until Hiei laughs and proves that his ice technique was ineffective against him. Seiryu then feels a small amount of blood trickle down from his head, and as the cuts reveal themselves he meets his painful end.
Kuwabara asks when Hiei attacked, but Kurama tells him not to feel bad since he couldn't see it either after the initial hit. The ice covering the room began to disappear and Hiei returns his sword back to its sheath. When his teammates finally reach him, Kurama asks how many times did he cut Seiryu, and he replies that he cut the Saint Beast sixteen times. Yusuke admits that if Hiei would use those moves the next time they fight he's going to be screwed, but Hiei turns his back against him and replies maybe, which surprises Yusuke a little bit. Kurama explains that Hiei is going through a tricky change, and it appears he's starting to like him.
Only one Saint Beast remains, Suzaku, who appears to be the leader of the saint beasts. Murugu, Suzaku's pet, returns with information about Yusuke. After learning about one of Yusuke's weaknesses, Suzaku plays the Makai Whistle, altering the attention of the insect-possessed humans towards Keiko. Botan notices the direction of the insect-possessed humans, and decides to follow them. While Keiko is arranging some fliers, she is attacked by Mr. Iwamoto, who is now possessed by the Makai Insects. As she is running away, she is confronted by more insect-possessed humans, and continues to run for her life. Back at Maze Castle, Kuwabara suddenly stops running and says that something bad was happening back in the Human World. As they continue to head for the last Saint Beast, Yusuke hopes that Keiko is alright.
Yusuke, Kuwabara, Kurama and Hiei rush into the next part of the castle as they reach the final chamber where Suzaku awaits. Unknown to them, Suzaku's master plan is already in motion - to capture Keiko. Meanwhile, in the Human World Keiko runs for her life as she is being chased by humans possessed by the mind-controlling insects. She runs into a corner and someone pulls her beneath. It was Botan. Botan calls Yusuke and tells him about the situation and Suzaku's plan to capture Keiko. But their conversation is rudely interrupted by the possessed people and together they run to an exit. On the other hand, Yusuke and the gang are stopped by hundreds of zombies, but then Hiei thinks of a plan, and Kuwabara, Kurama and Hiei worked together and formed a bridge for Yusuke to jump into the nearby entrance to the final chamber. They successfully accomplish the job, and Yusuke runs off to face Suzaku one-on-one as the three finish off the zombies.
Yusuke confronts the leader of the sacred demons - Suzaku, who is playing the flute of mind control. Just then Yusuke sees in a wide screen Botan and Keiko being chased by possessed people. With this scene, Yusuke becomes enraged and decides to take back the flute by brute force, and he starts to attack with a barrage of punches. However, Suzaku blocks every punch with only one hand, while the other continues to hold the flute which he plays. So Yusuke decides to finish things quickly and unleashes a devastating rei gun. However, Suzaku is prepared for the situation. He quickly deflects the rei gun off and destroys part of the chamber. Yusuke gets shocked at how powerful Suzaku is, because even after his intense training with Genkai, Suzaku was able to swat his rei gun aside. Then Suzaku decides to go on the offense, and he raises his hand as a lighting bolt strikes him - then his power as a lightning-demon arises and he attacks Yusuke with an enormous lighting fist. Yusuke was able to dodge it, but the force of the fist was so powerful it electrified him and knocked him down.
Meanwhile, Keiko and Botan get trapped by those chasing them, and Botan decides to fight them off to survive. Keiko uses herself as bait as Botan grabs a fire extinguisher and showers it over the possessed people. However behind her, another possessed person appears and tries to choke her out.
Yusuke takes off his shoes and puts them in his fists and prepares for another lighting fist by Suzaku. As Suzaku attacks, Yusuke uses his shoes to avoid being electrocuted, but the force is too strong as it destroys the shoes. However, Yusuke's plan was just getting started, as he uses the shoes to cover his power-up and unleashes a mighty right hand that hits Suzaku hard, and at the same time Keiko prevents Botan from being choked to death as she nails the possessed person with a mighty slap. It seems like things are now going Yusuke's way.