While climbing a mountain, the pilgrims discover a man who's been digging a tunnel through the mountain for the past twenty-two years, to provide an easier route for travellers. Ever-helpful Tripitaka tells his reluctant disciples that they must all stay and help dig the tunnel until it's finished. When Monkey uses his magic to help speed things up, Tripitaka is furious and dismisses him. Without Monkey around, the pilgrims fall into grave danger.

Desperate to please Chun-Shou, the woman he hopes to marry, the unhappy King of Unicorns promises to find a new toy for her spoilt brat son, little Chen. When he hears about Monkey's magic wishing staff, he decides this would be ideal. By capturing Tripitaka and using his all-powerful magic ring, the king plans to defeat Monkey and steal his precious wishing staff. While Monkey struggles to resist the king's magic ring, Pigsy finds it difficult to resist Chun-Shou.

On their way to India, the pilgrims must pass through the Land of Nightmares, inhabited by all the legions of Hell, bad demons and wicked spirits. All humans who go there are eaten, and all others must take a magic test upon entry to the land. To allow Tripitaka to travel through safely, Monkey disguises him as a beautiful longhaired female demon, and teaches him some basic magic. Will the King of Bad Dreams see through Tripitaka's disguise?

Tripitaka and his disciples are just a few days away from reaching India - they can clearly see the Gold Temple of the Thunderclap ahead. The King of All Geological Ages appears and says he'll stop them reaching India. Pigsy finds the king's beautiful wife strangely familiar, he knows her from somewhere. The king captures Tripitaka and puts the indestructible Iron Collar of Death on him, to choke him to death. This looks like the end for Tripitaka.

A gentle monster dresses up as a puppy dog and calls himself ""a good dog"" in an attempt to make friends. He desperately wants to be liked, but all the villagers are terrified of him. The pilgrims arrive at the monster's country, and Tripitaka tells his disciples to go ahead and make friends with him. After Pigsy, Monkey and Sandy fail, Yu-Lung befriends the good dog, and comes up with a plan to make the villagers like him.

While taking a rest from their journey, the pilgrims are confronted by four sorcerors who are impersonating them. They plan to assassinate Tripitaka and his followers, to improve their ranking in the sorcery community. By wreaking havoc on villages, the imposters ensure that the real pilgrims are blamed and made unwelcome everywhere they go. Monkey decides that Tripitaka should continue alone for a while. The disciples split up, and become targeted by their clones. Will Tripitaka ever see them again?

The pilgrims are welcomed to a village headman's house. He shows the disciples a screen that has a picture of the beautiful Goddess Sorosvati painted on it, along with the six other Gods of Good Fortune. During the night, the goddess magically steps out of the screen, tricks Tripitaka, and takes his place on the pilgrimage. While she enchants the others, Monkey discovers Tripitaka trapped in the screen. Can Monkey free Tripitaka and get the goddess back on canvas?