The J-Team unites to battle the anti-J-Team, and Jade casts a spell that backfires and turns the J-Team into toddlers.

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.

Uncle has fashioned a locater for the activated relics. As Jade watched a game show called, ""The International Island Challenge,"" the locater senses the next relic, which is the prize on the game show: the gourd containing the Water Demon's chi. Jade pleads Jackie to let them enter the contest held on Boru Island, but Jackie explains that this is a serious mission. However, on the set, the producer mistakes Jackie, Uncle, Jade, and Tohru as a competing family. They must face off against the Dusseldorf family, but they fail in the first task when Tohru falls off the bridge after being pelted by coconuts. However, it is Uncle who is voted out of the family, but he manages to stay on the island for the night after complaining about his supposed fear of flying.

In the second round, neither family wins the bug-eating contest, so they must race in the tie-breaking round. When Jackie, Tohru, and Jade near the finish line, Drago appears, manages to obtain the Water Demon chi, and creates a tid

Jade's hopes of a birthday celebration are dashed when Drago's failed attempt at stealing the recovered two demon chis puts everyone on high alert at Section 13. The postponement of her birthday continues when two demons' chis, earth and moon, are activated within the same day. It is a race against time as Jackie, Uncle, Tohru, and Jade attempt to stop Drago, his new henchmen, Strikemaster Ice and his gang from acquiring the power of the two chis.

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.

The Demon Chi briefly escapes from the Containment Unit. All of them are retrieved, except for the Earth Demon chi, which flees Section 13 and inhabits the body of one of Jades' Friends Larry (a comic book nerd, who also loves Super Moose) who proceeds to use his new demon powers for good as the superhero Spectacularry. Unfortunately he causes more problems than he solves.

To prevent Draco obtaining the Earth demon Chi Jackie, Jade and Uncle Head to where any comic nerd with super powers would go, a comic fair. But the Demon Chi is slowly overwhelm Larry's good nature and with Drago closing in, Jackie, Jade and Uncle must save Larry before his super heroics destroy all around him.

Tchang Zu's demon chi is located in the ruins of the Titanic. Jackie, Jade, Tohru, and Uncle, ridden with the flu, journey into the murky depths of the wreck to find it, but Drago has followed them. Things aren't helped when Jackie suffers from being down in the cold water for too long and he loses all grip of his senses...

After fully absorbing the chi of Tchang Zu, Drago sets out to magnify the power of the thunder chi by turning his new lair, Seattle’s Space Needle into his own personal electrical rod. Uncle reveals that the longer that Drago has the demon chi, it will become even more difficult for him to remove it.

The chi of the mountain demon, Po Kong is released after Tohru has a midnight snack whilst on a diet.

Drago succeeds in capturing Jackie, Uncle, and Captain Black. He holds them for ransom in order to get the prize that he so desperately wants, the Chi containment unit. With the lives of their loved ones hanging in the balance, Jade and Tohru confront Drago and turn to an old enemy for research. It appears that Jade and Tohru aren't the only ones hoping to double-cross the son of Shendu.

Captain Black, the J-Team, and some old adversaries put their differences aside to come together in order to stop Drago who is on the verge of conquering the entire world.