The villagers of Teashu Village are nourished by the ancestral dragon pearl of the back mountain, harboring fake dragon blood, but are tricked by three Qilin demons from the Celestial Beast Taming Academy using an ancient fairy table barrier, setting up a fake dragon gate, destroying the village and forcing all villagers to transform into dragons. The Jade Emperor goes on an undercover visit, stumbles into a soul-draining grand formation and loses all magical power, only to be captured and refined by the evil demons. Taibai sees through the barrier's flaw, leads heavenly soldiers back to heaven to intervene from outside the fairy table with dimensional reduction, saving the Jade Emperor and annihilating the evil demons. After reviving, the Jade Emperor bestows true dragon blood upon the villagers, resurrects those who died unjustly, and opens the True Dragon Gate to deliver all living beings, making Teashu Village a sacred place of the true dragon ever since.