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During the Boxer Rebellion, benevolent scientist Dr. Fu Manchu saves the life of little Lia Eltham; but soon after, his own wife and child are killed by the allied troops. Still in shock, he vows to kill an allied officer for each bloodstain on the sacred tapestry-dragon and proceeds in his plan by hypnotizing the now grown Lia to do his bidding. Under Fu's spell, Lia meets and falls in love with Jack Petrie, grandson of an officer whom Fu is determined to kill. The grandfather is mysteriously murdered, and Jack and his father go to their country home, where Fu finds them and kills the elder Petrie. In the meantime, Jack has warned Lia of Fu's nefarious deeds, and both are saved from the doctor's treacherous hands by Lia's kindly Chinese servant.