Five children discover from Shen the Dragon that they are spirit warriors, on a quest to find twelve spirit pieces - if they fail, the evil Li will find them and then control the universe!

The Spirit Warriors get their fortunes told by Master Wu - who foresees a mixed future of ghost dogs, dreams come true and a visit to the Labyrinth of Lost Spirits. Soon the predictions appear to come true, but are they really? And why are Li's dreams haunted by Master Wu?