A village notices something approaching in the woods and is attacked by a monstrous giant demon. A man calls a demon slayer named Sango, who quickly defeats the giant centipede and retrieves a fragment which she reveals to the village. After taking off her armor and preparing to leave, the village offers her a payment fee for slaying the monstrous centipede, but she refuses, accepting the Sacred Jewel fragment she retrieved from the centipede. Meanwhile, Inuyasha, Shippo, Miroku, Kagome, and the others are resting in the forest by a fire that the group has set up, with Shippō wondering about how many stars there are. Inuyasha reminds the group that Naruku is collecting Sacred Jewel fragments as they speak, with Shippō saying that the more and more fragments Naraku gathers, the stronger he gets and that if he manages to retrieve all the Sacred Jewel fragments it'll be too late for the group and the best strategy is to gather more Sacred Jewel fragments than Naraku. Miroku asks Inuyasha that if he does manage to retrieve all the Sacred Jewel fragments and become a true full demon, will he remain the same person as his? Inuyasha claims that he won't because he doesn't need to anymore and is happy to be a half-demon thanks to Sesshomaru. While stating this to be a theory, Miroku believes that those who seek and obtain the Shikon Jewel lose their hearts in the process. 

The next morning, Inuyasha and the group encounter people from the nearby village and discover that a woman had not only defeated a demon but had retrieved a Sacred Jewel fragment. Miroku asks Inuyasha if he knows about this. Inuyasha says 'no' as when he first came across the Sacred Jewel it was already in Kikyō's possession and he never even thought about how the Sacred Jewel was made or where it came from.

Meanwhile, Sango returns to her home village and reveals that the latest demon she slew was a centipede and that a few pieces of legs and skin were all she could bring back. After explaining this, she is greeted by her pet Nekotama, Kirara. After petting Kirara, Kohaku, Sango's younger brother comes and reminds her that wants to see her. After showing the Jewel fragment to her father, he performs a ritual in an attempt to suppress the evil inside the Jewel. Despite this, he expresses doubt of it working, explaining that 50 years prior it was in the possession of a priestess who had unusual purification abilities but was killed in a fight for control over the Jewel. Sango's father advises that the family watch over the Jewel fragment until they find someone who has the ability to purify the Jewel. Sango leaves to rest, while her father advises Kohaku to start battle training. Kohaku asks Sango if all demons spit toxins and breathe fire, who explains that some of them do, but that the ones they need to be most afraid of are the ones that pretend to be human.

Later that night, Sango, Kohaku, and another group of demon slayers are hired with the task of killing a giant that has been terrorizing every night and killing several people. The castle's keeper notices that Sango's younger brother Kohaku, and Sango's father claim that Sango and Kohaku are the Province's two top fighters, which is only true of Sango. After everyone is told to do their best at slaying the spider demon, the said monstrous creature appears from the clouds and attacks the group. Meanwhile, inside the castle, tells Kagewaki that demon slayers have been hired and that the demon is responsible for his illness. Everyone at the castle is amazed by Sango's fighting skills, and the group easily takes down the monstrous demon. Upon noticing this, Sango rightfully suspects that the demon is a little too easy to slay and suspects that this one is a trap. Sure enough, a piece of silk attaches to Kohaku, and under its mind control he begins killing villagers, and his father and even tries to attack Sango, who notices that the true spider demon's silk thread leads to Kagewaki's castle and she quickly realizes that Nagasaki has been possessed. She tries to head to the castle and attack but she's injured by Kohaku who is shot with arrows from the castle guards and Sango is also shot. Kagewaki arrives and shows everyone that Nagasaki was actually possessed by the demon, explaining why he suddenly started acting strangely.

Meanwhile, Kagome and the rest of the group are navigating their way through the forest and are having a hard time finding the village of the demon slayers. Kagome is particularly interested in learning the origin of the Sacred Jewel. Soon, the group notices a hoard of demons flying overhead and realizes that they're after something. Meanwhile, back at Kagewaki's castle, Sango and Kohaku are presumed dead and buried, but Sango isn't willing to give up without a fight and because her grave is shallow and the dirt is easy to dig through, she easily escapes her shallow grave. Meanwhile, Naraku who is in his baboon mask witnesses an attack on the village from a distance and immediately heads down to retrieve Sacred Jewel fragments.

Meanwhile, Kagome and the group, who have been following the demons for the night arrive at the village to find that the villagers are dead and the worst of the damage has already been done. Izuku also points out that he doesn't sense any Sacred Jewel fragments there, meaning that Naraku has already taken them. Inuyasha suggests that they bury the dead villagers first before moving on to find the Jewel fragments. Before they can start, however, Kagome is quick to notice something approaching them, it's revealed to be a giant nekomata who approaches them growling until a voice tells her not to attack and that they're not enemies. The voice is revealed to be none other than Myoga and the nekomata is revealed to Kirara. Myōga explains that for generations, the inhabitants of the village worked and trained to fight demons but were killed at an unusual time. Myōga also informs Inuyasha that he followed rumors of the Sacred Jewel, which led to their village, and while trying to find the village and the group, he came across a white baboon, who Inuyasha recognizes as Naraku.

Meanwhile, Sango overhears Naraku informing Kagewaki of the village's destruction and framing Inuyasha to do it. Believing Inuyasha to be responsible for the death of the villagers, she retrieves her weapon and vows to kill Inuyasha. Naraku made his way to Inuyasha with Sango because the lord of the castle allowed her to fight him and Naraku. However, due to her injuries, Sango is having a hard time keeping up. The lord of the castle thinks that Naraku is a good person. On her way, Sango gets weaker and weaker and thinks about the hour of her brother's death, but then Naraku gives her a piece of the Shikon Jewel so that she can go on living and she accepts. Myōga leads Inuyasha and his group into a cave in front of the village of the demon hunters, as the jewel of the four souls is said to have been created there. In this cave, the villagers also stored the remains of demons that they could not use and at the very bottom of the cave, there is said to be a giant demon. Inuyasha makes his way into the cave, but he is stopped by a blockade that was set up to protect him from intruders. Inuyasha can't get into the cave by force, and Miroku decides that they should find the demon hunters who went out to get them over the barrier can experience. 

Unfortunately, nobody knows where the lock is and Inuyasha's nose can't feel anything either when they are surprised by Sango's Hiraikotsu, which partially falls the wall and almost catches them. Inuyasha doesn't understand when Sango says she wants revenge, but words cannot get hold of Sango's weapons. She takes it as a mockery when he asks why she is attacking him since she is firmly convinced that he has destroyed her people's village. When Miroku wants to suck in the Hiraikotsu with its Kazanna, Naraku's Saimyosho appears and he himself stands behind Sango. Inuyasha tries to jump on him, but Sango stops him and Shippō realizes that presumably Naraku said that Inuyasha destroyed her village and Kagome realizes that she has a jewel shard in her back. Now Sango defends herself with her and Miroku is fighting against Naraku. But Naraku lets his hand be cut off, takes Kagome's jewel shards and the hand flies back to him. Then Naraku flies away in demonic form and Sango orders the resurfaced Kirara to pursue Naraku. Inuyasha wants to follow, but Sango stops him again, even if she doesn't quite trust Naraku. Inuyasha knocks off Sango's breathing mask and then saves her from the miasma, but as a thank you she stabs her sword through his arm, which has no effect on him also because Sesshomaru stopped it. Then she realizes that Naraku may have betrayed her and also notices her extremely bad wounds. Now Sango remembers a conversation with Kohaku when she encouraged him to fight demons and her last conversation with him in the castle before he died from the injuries of the arrows. Then she collapses from wounds while Miroku is still chasing Naraku and finally Kirara picks him up and Miroku beats Naraku. This then lets brown tentacles emerge and force the two down.

Sango wakes up on Katsuki's back, who has already set out with her and Kagome to confront Naraku as well. Sango is still prejudiced against him, but Kagome says that Inuyasha is actually a nice Half-Demon, but just doesn't show it. The others tell Sango about themselves as well as their displeasure with Kagome. Miroku and Kirara fight against Naraku, but every broken tentacle grows back together and then Inuyasha comes and saves him from a mortal wound. Now Naraku admits that he told the demons that there are no more guards in the village and that he threaded the story in the castle and thus led to the death of all people around Sango. Sango attacks him, but then the splinter of jewels falls from her back and she feels all her pain again. Inuyasha jumps towards Naraku and cuts off his head, but the body continues to move and attack. He can regenerate again and again, which the jewel splinter also contributes when Sango realizes that they are only dealing with a doll and tells Inuyasha that he should aim at Naraku's heart, whatever works and what remains is only a wooden figure that is divided in the middle. However, that also means that they got the jewel, but not Naraku. 

Without anyone noticing Yami, Vegeta, and Katsuki went to the castle. At the mansion where the real Naraku is, a wooden doll, just like the one with the puppet, breaks. The servants tell the young lord that Sango and Naraku haven't returned. When the servants depart, Naraku explains that he knows what really happened and leaves his quarters and as he does he magically puts on the baboon skin. Unknown to him, the three spies figured out the true identity of the lord and went back to the others with photo evidence.