The evil Lord Conqueror, head of Conqueror's Clan, is given a prophecy by Mud Buddha when quizzed about his delayed duel with Sword Saint. The prophecy translates that if Conqueror finds two young children by the name of Wind and Cloud he will have good fortune. Mud Buddha provides the birth charts of these two and gives him a puzzle box stating that finding Wind and Cloud is but one half of his destiny, the box will provide him with the latter half once he unlocks it. Conqueror issues an order that every boy with a birth chart matching Wind's or Cloud's must become a disciple of the Conqueror's Clan. Whispering Wind is discovered as the son of long time rival Whispering Prince, who Conqueror had beating 2 years previously and stole Prince's wife. As they fight again for Prince's Blizzard Blade he reveals he only took his wife to anger him into battle to possess the blade. At the climax of the duel Prince's wife kills herself and Prince is captured and killed by the fire beast in the nearby cave. Conqueror finds Whispering Wind has fainted and claims him. Striding Cloud's father, a blacksmith named Striding Sky, is forging the Ultimate Sword and completes the blade just before Conqueror's forces raze his village. As he is killed he reveals that the sword can only be used by a true hero and Cloud is taken by the invading forces.

Ten years pass, and Wind and Cloud are now both fully grown and highly skilled martial artists, raised as Lord Conqueror's own beside his daughter Charity and adopted son Frost. The 3 sons act as Generals in Lord Conqueror's army. Wind has been gently trying to court Charity but she is secretly having an affair with Cloud. Conqueror is angered by his inability to open the puzzle box and the disappearance of Mud Buddha. He sends Frost and Wind to find him while Cloud is sent to claim the Unchallenged Sword and lead closer to completing his collection of powerful weapons in his Sword Graveyard. Cloud succeeds in claiming the weapon after killing its owner. Frost and Wind find Mud Buddha, now disfigured by boils as punishment from the Gods for revealing too much about the future to others, but he is soon taken by a mysterious hooded fighter who manages repels both Frost and Wind. The captured Mud Buddha unlocks the puzzle for Conqueror and reveals that "the dragon is powerful but will be stranded when wind and cloud become a storm" therefore ending Conqueror's tyranny. Realizing it refers to Wind and Cloud and unwilling to accept his fate Conqueror plots to destroy them both.

Upon realizing Cloud has been sleeping with Charity Conqueror decides to use his daughter to cause Wind and Cloud to fight each other by arranging marriage with Wind and Charity. Cloud discovers this and is quickly angered. On the day of the wedding Cloud abducts Charity and Conqueror tells Wind to fight for his wife. Wind and Cloud engage in a battle and Lord Conqueror tries to kill Cloud in their duel, but Charity sacrifices herself to save him.

As Wind quietly grieves for his love, Cloud fights the Phoenix family for the Ice Vigor and uses it to preserve Charity's body, but is soon discovered by Conqueror. As they fight in a temple in the desert without water, Cloud's Palm style proves to be useless against Conqueror without any source of liquid at the area. Cloud rips off his arm and uses his own blood as a final resort to be used as source of liquid which is necessary for his palm style to unleash considerable amount of power to create an opening for escape. He is then discovered out cold by Muse and her father, Summit Yu. As they nurse him to health Yu discovers that the Fire Beast Arm he has trained to perfection rejects him and wishes to be bonded to Cloud and calls on specialists to bond his arm to Cloud.

Unable to find Cloud Conqueror moves onto destroying Wind, who he secretly poisons and sends him on a mission to claim the Blood Bodhi fruit. As the poison takes its toll Wind remembers the truth about who killed his parents, and uses the Blood Bodhi fruit that grows in the cave to heal himself as well as make him even stronger. He then defeats the fire beast who killed his father using the Blizzard Blade retrieved by his father's corpse. Cloud trains his new arm with the help of Muse's kindness before decided to head back to Conqueror's kingdom.

Conqueror, believing himself free of the prophecy, challenges and defeats Sword Saint out of blind chance. Now deluded into the belief he is invincible he arrogantly kills Frost, who recently discovered it was Conqueror who kidnapped Mud Buddha and held him against his will and learned of Conqueror's evil ways. Wind and Cloud meet upon the steps to Conqueror's main hall and, united by their common enemy, confront Conqueror. As the fight spills over into the Sword Graveyard. Wind and Cloud are almost outmatched by Conqueror's superior sword skills however the blood from a cut on Cloud's arm reveals to him the location of Ultimate Sword (which Conqueror unknowingly had amongst the standard weapons littering the ground). With Striding Sky's sword in hand, Cloud rejoins Wind in the battle and Conqueror is soon beaten, with Wind stopping Cloud from landing the death blow so Conqueror is left insane and tormented by the ghosts of those he has killed, including his beloved Charity.

imdb:tt0984171