Disowned by his parents for being unable to do sorcery, the young demon Shosanpu practises on the unsuspecting pilgrims, but is soon found out. After listening to his story, Monkey decides to give him special training, against Tripitaka's wishes. Using Monkey's staff, Shosanpu turns the four pilgrims into stone statues, and goes to fetch his father, Yuzankun. While he's away, the four statues are stolen and taken to an auction. Will Shosanpu find them in time, to change them back?

After losing their way, the pilgrims find themselves heading towards Mt. Blue Wolf, a place where hideous wolf demons swagger like peacocks. Their leader, Blue Wolf Demon, craves human flesh, and sets his sights on the tasty Tripitaka. While looking for food, Dragon falls off a cliff. He is rescued by a farmer called Ri Shishin, who turns out to be a wolf in sheep's clothing; Blue Wolf Demon makes him an offer he can't refuse to hunt down Tripitaka.