12 years pass and Prince Wolgang is living outside palace walls, seemingly unfocused and carefree about the life that he leads. Meanwhile, Do Ha makes her way to the capital in search of her sister.
Haunted by his nightmares, Kisan calls back Sadam to help him with his Taoist powers. Wolgang is continually followed by three friendly ghosts even though he does everything he can to ignore them.
The King comes up with a plan to make the Prime Minister and Prince Wolgang attack each other politically. He begins to lose his trust in Sadam, who resorts to desperate measures to regain his influence.
When Moo Seok's sister becomes further entwined to the goddess of smallpox, he is propelled to join the Night Watchmen and stop the goddess before she attains her ultimate goal.
The newly formed Night Watchmen try to stop Sadam from resurrecting the monster serpent when construction begins on a pagoda that will aid the serpent to ascend to the heavens.
The Night Watchmen have a plan to take down Sadam, but they've greatly underestimated their foe. Meanwhile the king's split personality becomes an issue when the darker side takes control of the king's body.
The Night Watchmen discover a doppelganger in their midst and embark on a mission to undo Sadam's spell. Kisan's demands to build the temple faster takes a toll on the people of Joseon and his court.
Yeon Ha's soul is so corrupted that she begins to wreak havoc on the palace, and not even her sister can save her. Soo Ryun takes over Maeranbang in an attempt to ensure her future as Wolgang's wife.
The Prime Minister attempts to overthrow the monarchy with the help of Sadam and his evil ghosts. Moo Seok's loyalties are tested when he is forced to choose between the Night Watchmen and the King.
Sadam and Soo Ryun manipulate Do Ha to get what they want from her, but their own interest conflict with each other. Wolgang does everything he can to save Moo Seok from the underworld.