Following the First World War, Lamont Cranston sets himself up as a drug kingpin and warlord in Tibet. He is abducted by servants of the Tulku, a holy man who exhibits otherworldly powers. He offers Cranston a chance to redeem himself and become a force for good. Believing himself irredeemable, Cranston initially refuses and is attacked by the Tulku's Phurba, a mystical flying dagger. Ultimately, Cranston becomes the Tulku's student and learns how to hypnotize others and bend their perceptions so that he becomes invisible, save for his shadow.