Nezha 3: The Demon Child Rampages Through Yuxu Palace tells the story of Nezha facing a new challenge after overcoming countless trials in Chentang Pass. Though Nezha has successfully resolved the crisis in Chentang Pass, his identity as the reincarnation of a demon orb remains a source of danger in everyone's eyes. Wuliang Xianweng of Yuxu Palace appears to possess the refined bearing of an immortal, but secretly harbors sinister intentions and schemes to control the Three Realms. Knowing that Nezha bears the powerful force of the demon orb, he carefully plots to use Nezha to achieve his own ambitions.
Wuliang Xianweng unleashes powerful illusions, fabricating a scene in which Nezha's demonic nature erupts and Yin Furen is consumed by demonic fire while protecting her son. He shows this illusion to Jinzha and Muzha, then gives them magical treasures designed to counter Nezha and Ao Bing. Jinzha receives the Nine-Calamity Soul-Suppressing Pagoda, which can seal the primordial spirit and is especially effective against lotus incarnations. Muzha receives the Soul-Rending Whip, whose lash marks attack the soul directly and make it the bane of Ao Bing's remnant spirit. Jinzha and Muzha believe the illusion is real. Convinced that Nezha is a demon who murdered his own mother, they are consumed by hatred and decide to go to Chentang Pass for revenge.
Caught off guard, Nezha is driven into a desperate situation by his brothers' surprise attack. Jinzha uses the Soul-Suppressing Pagoda to seal Nezha's primordial spirit, preventing him from using his three heads and six arms. Muzha lashes apart the ice armor Ao Bing possesses, bringing Ao Bing's soul to the brink of dissipation. During the fierce battle, Nezha is forced by his brothers to the bottom of the sea. At the critical moment, Ao Bing burns his own remnant soul and merges the Frost Spirit Core into Nezha's chest, helping him awaken the Ice-Fire Lotus Body, with flames on his left side and profound ice on his right. With this new power, Nezha breaks free of the Soul-Suppressing Pagoda.
Then, at a crucial moment in the battle, Nezha throws out Yin Furen's jade