In Shanghai during the 1930s, Sing and his sidekick Bone aspire to join the notorious Axe Gang, which rules the town under the leadership of cold-blooded Brother Sum. One day, the two visit the Pigsty Alley – the slums of the town. Claiming to be Axe Gang members, they try to blackmail the residents there, but the Landlady chases them off. Sing, in an attempt to bluff them, throws a firecracker (which he claims is a signal to summon his gangs), which blows up the hat of a minor Axe Gang boss passing by. Sing blames the Pigsty Alley residents for throwing the firecracker. The gang boss attacks a barber, only to be struck by an unseen assailant. The remaining gangs fire the signal to summon more gangs there. Three of the tenants – Coolie, Tailor, and Donut – reveal themselves to be Kung Fu masters and triumph over all of the gangs. Fearing the Axe Gang's retribution, the Landlady quickly evicts the trio.
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