While Jade has an out-of-body experience when she uses the Astral Projection talisman, and while she was roaming around Uncle's shop, the Dark Hand grabs the magic object and Shendu uses it to slip into her vacant body. Pretending to be Jade, Shendu tricks Jackie into telling her where Section 13 was in order to steal all the talismans.

After having a fight with Shendu, Valmont keeps the Dragon Talisman of combustion for himself and not only busts into the U.S. Mint but puts Captain Black into the hospital as well. Valmont steals all the gold in the reserve, and Jackie must get the talisman, but this time, he has to use his brain to defeat Valmont because of Valmont's incredible powers.

Jade uses the latest talisman to turn herself into a monkey to escape the Dark Hand, but the boat collapsed and the Dark Hand, Jade, and Jackie are stranded on an island. Jade gets caught off guard when another monkey takes the talisman, and now Jackie must find Jade, while the Dark Hand is trying to find the talisman.

In a mix of science and magic, the Rabbit Talisman sends Jade back in time to 1976, where she encounters younger versions of Jackie, Uncle and even Valmont. However when Shendu sends the Enforcers back to recover the Talisman (Which Jackie follows), they decide to try to change history by getting rid of the younger Jackie Chan.

Daolon Wong releases Shendu from his etheiral enprisonment in exchange for the talisman power of the Dragon - Combustion. Jackie, Uncle, Jade and Thoru attempt to stop Shendu's return to earth but fail. Shendu goes back on his deal w/ Dalon and absorbs the Dragon power for himself, and then drains Dalon of the tailsman powers he holds. Shendu persues Jackie back to Section 13 where the other talisman animals are. Before Shendu can absorb their powers, Jackie and Jade flee with the animals. Shendu stops Jackie and Jade at the zoo. Depsite Jackie's heroics, Shendu absorbs all of the talisman powers. Before Shendu can finally destroy Jackie, Uncle, Thoru and Section 13 arrive chanting a chi-spell (that Uncle got from Daolon Wong). The spell returns Shendu to his 'original' statue form and the talismans pop-out from his body. The talismans and Shendu are locked up in Section 13's vault for good.

Drago breaks out of Section 13 on a mission to absorb the demon chi that is held in the original artifacts used to defeat the demons so many years ago. He finds the Enforcers at a petting zoo and transforms them into dragon-human hybrids. Drago locates the fan that holds the chi of the Wind Demon. Meanwhile, Jade gets into the nasty habit of burping. Jackie and Captain Black hunt Drago down to a Chinese-themed car wash, where the fan is located. Unbeknownst to everyone, Jade absorbs the demon chi. At school, her burps create powerful wind storms, and she begins to transform into a frog. Drago attacks Jade at school in order to absorb the chi, but Uncle and Tohru arrive to capture it instead. Drago fires the Enforcers and turns them back into their old human selves after they prove that they are weak and useless.

After capturing the chi of Hsi Wu, the sky demon, Uncle attempts to place it in the chi containment unit. However it is broken, so the chi must remain in the chi-o-matic. Thinking that it is empty, Jade then takes Uncle's chi contraption with her on a school field trip to a haunted doorknob museum. Jade's teacher, Mrs. Hartman confiscates the chi-o-matic and accidentally infuses herself with Hsi Wu's chi. Things get worse in the haunted house when Drago appears and the ghosts get angry at the presence of two demons in their house.