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 accidentally drops the Rat Talisman into the battery compartment of her Gnomekop toy, and it comes alive through the power of reanimation. The toy is grabbed by the Dark Hand and is used to get to Section 13. Jade and Jackie must track the toy down.

Jackie is poisoned by the Dark Hand and will give him the antidote for the talismans. Jade steals all the talismans, while the Dark Hand destroys the antidote. When Jackie fully turns to stone, the Horse Talisman heals him.

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.

Uncle helps Jackie retrieve the Pig Talisman from the Dark Hand's newest enforcer, Hak Foo, using the Dog Talisman's power of immortality. Jackie and Jade could not believe the strength that Uncle used on the Dark Hand.

The Tiger Talisman splits the dark and light sides of Jackie in two, which makes it easy for Valmont to trick his dark side into working for the Dark Hand. The light Jackie could not do anything, he does not want to fight, while the dark Jackie steals the 12 talismans from Section 13. Both halves fight for the talisman, but Valmont gets to it first and uses it to turn Shendu into it's old self again, an alive, giant dragon demon.

Shendu retrieves all twelve talismans and transforms into a humanoid dragon. Now, he is on the loose and ready to destroy the entire continent of Asia. Jackie, Uncle, and Jade must find the demon and annihilate it before Asia is dismantled. Uncle makes a magic potion that allows Jackie to penetrate Shendu's skin to steal the twelve talismans back.