Picking up from the events from their previous adventure, the Young Dragons (Ah Kuo, Hsiao and Chubby) are living the good life in modern day Taiwan with their grandparents who are finally back together again. But when Grandma suggests that the boys go to school to better adapt to city life, Grandpa is against it, as he wants the boys to continue their kung fu training so that they can become top martial artists. When the boys are enrolled into a prestigious school for gifted children, they once again find that their old-fashion way of life clashes with the new-age way of Taiwan's residents. The Young Dragons feel like fish out of water and even have to deal with a loud, cantankerous teacher named Miss Wu Zhen Chu who is almost as bad as Grandpa. When the Young Dragons stop a bunch of criminals who attempt to take the school hostage, the boys become national heroes, causing their grandfather to feel left out as it was his training that allowed them to subdue the bad guys. And when Grandpa unknowingly gets himself involved with a bunch of syndicate thugs running an illegal fight ring and disappears, the Young Dragons will have to pull together like never before in order to find Grandpa and hopefully, reunite the family to crush the crime syndicate that tried to exploit their beloved grandfather.