He leads a gang of rebel youths that started their attacks by the robbery of a bank. They explicitly ask a bank worker to call the police, and are confronted by the police outside the Legislative Council building. They play a sadistic game, in which they are awarded money for shooting police officers with assault rifles, before making their escape.
Inspector Chan and his squad are called to arrest the gang after their hideout is revealed. However, the hideout is rigged and the ten man police squad fall into various traps one by one. Chan then finds his men in a large warehouse, suspended from the high ceiling by ropes. The gang challenges him to training regimes that are taught to policemen, betting lives of his men each time. Under mental pressure and the taunts of the gang, Chan loses and is left with only his would-be brother-in-law to save, who soon dies nevertheless. He tries to save the bodies of his comrades for burial before explosives blow up the building.
Being the sole survivor of the incident, Chan takes a year long leave from the police force, drinking heavily to drown his sorrows and guilt.
The timeline jumps back to the present day. The stranger, who first featured at the start, brings him home. When Chan wakes up, the man identifies himself as PC 138, Frank Cheng, his new partner. Frank tries various means to convince Chan to cancel his leave and take up the case but Chan refuses. However, he comes to his senses eventually by apprehending the same two youths that robbed him. At the police station, Frank tells Chan that he is Kwong's younger brother, which convinces Chan to relook into the case.
Frank and Chan convinces Sam Wong, a former colleague of Chan, to reveal a clue from the night of the first robbery; a watch which he snatched from one of the robbers. Chan and Frank are tailed by the police as they go in search of the owner of the watch. Sam Wong was also arrested by the police to assist in the investigation. Sam Wong is shot dead by another gang member, Fire, before he manages to identify the robber (Sue). Before dying, Wong confesses to Chan that he was blackmailed by the gang into revealing their rigged hideout to Chan's team a year ago, due to the bag of money he took from Sue to pay off his debts.
Fire and Sue both manage to escape the building, with Chan and Frank pursuing Fire. To distract Chan, Fire shoots at a bus driver and sends the vehicle out of control. Chan quickly jumps onto the roof of the bus in an attempt to stop it. After the careening bus has caused a great deal of havoc, Chan finally manages to climb in and hit the brakes, halting it from falling into Victoria Harbour, while Frank rams a truck full of rubber ducks in front of the bus' path.
After the incident, Chan discovers that Frank is not really a policeman, and confronts him. Frank attempts to explain to Chan, but Chan refuses to believe the story. Regardless, they stay together to continue to track the gang leader, Joe. They are informed by Officer Sa Sa that the gang members all come from rich families and the gang leader is actually the son of the police chief.
Sue and Fire return to the gang's new hideout. Sue is badly wounded, after being shot by Frank earlier. Seeing her injury, Joe shoots and kills her. Joe's gang access Chan's police file on a computer, with Joe bent on taking revenge.
Joe then arranges to meet Chan's girlfriend, Ho Yee, in the police station. He wraps a time bomb around her neck before leaving. When Chan learns of the bomb he desperately tries to free her. Ho Yee cuts the wires, with no effect, leading the police to believe that it is a fake. But when the two get ready to leave, a small wire attached to Ho Yee's back pulls out the secondary trigger, causing the bomb to explode. Before she can escape, it explodes and some falling pipes land on her, knocking her into a coma. Unfortunately for Chan, he is charged with assisting the impersonation of an officer (Frank) and for acting as an officer while under suspension.
After Chan and Frank are taunted by Joe's gang, Sa Sa and her father, the jailer, release both of them illegally. The two sneak out of the police station, with everyone deliberately ignoring their escape. Commander Chiu Chan even makes his handgun available to Chan and tells Chan:'bring it back when you're done'. Chan, Frank, and Sa Sa then go to a computer cafe to find teens playing the game up until they complete the most recent level to find out the gang's next target is the Bank of Hong Kong, located in the New Wing of the Hong Kong Convention and Exhibition Centre].
A squad of police officers arrive, but this time Chan stops them from rushing in, assigning them the task of calmly escorting the public out of the building. Once the public are moved to safety, the gang members' parents are sent in, much to their dismay. One of the gang members, Max, is so ashamed of himself that he attempts to run down the escalators to his parents, only to be shot dead by Joe.
Afterwards, Chan and Frank run up to engage the three remaining gang members. Frank manages to shoot Fire in the leg with his own gun, disabling him. Chan chases another gang member, Tin Tin, into a Lego exhibition. When the exhibition hall is emptied, Chan reminds him that they had struck a draw the last time they fought. The two engage in hand-to-hand combat, with Chan defeating Tin Tin. Joe then chases Frank into the hall and shoots at him. In the crossfire, Tin Tin is shot in the chest.
Joe manages to chase Frank out of the room just moments before the Special Duties Unit of the police arrive. Tin Tin grabs a gun from the floor and points it at Chan's back. Chan, oblivious to what's happening behind him, calls out to the squad to bring in a medic for Tin Tin. Contemplating what he has done and how Chan is helping him, Tin Tin decides not to shoot Chan.
Chan finds Joe on the roof of the Convention Centre. Having captured and tied up Frank, Joe threatens to throw him to his death. Joe challenges Chan to a race to assemble a semi automatic pistol, a rematch of an earlier challenge, and wagering Frank's life in the process. This time, Chan chambers the bullet first and wins the game, much to Joe's disbelief. A number of policemen arrive on the roof, along with Joe's father, the police chief. Joe's father reprimands him, while Chan tells Joe that he knows that he doesn't hate cops, he merely hates his father for berating him.
Due to what Chan and his father have said, Joe finally admits defeat and deliberately unloads the single bullet in his gun and aims the empty gun at Chan for the police to have a cause to kill Joe. Not knowing that Joe's gun is empty, a police sniper then fires and injures Joe. He weeps and aims at his father, causing the sniper to fire once more, hitting him in the chest and presumably killing him despite Chan's yelling that the gun was empty.