Otogi 2 takes place directly after the events chronicled in the original Otogi: Myth of Demons. Raikoh, the famed undead warrior, managed to temporarily save the Japanese population from an onslaught of demons, but had not been able to vanquish them all before returning to his grave. The demons have now resurfaced from hiding places within the sacred capital of Japan, and they are attempting to take control of man once more. In response, five brave warriors take their own lives in a ritual to resurrect Raikoh. Raikoh rises again and the five selfless warriors rise with him, all set to take on the encroaching demon spawn as a team.