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Xiaolin is one of the major Kung Fu institutes located in Happy Town. Happy Town is a small town that has become well known because of the reputation of Xiaolin and Xiangdang Institutes. They treat each other as competitors and trick each other. The righteous and vigorous yet a little rash Yuan Long, joins Xiaolin Institute. He meets Yuan Fu, a smart and proud girl, and the friendly Yuan Xiong. They quickly become good friends and soon go on adventures, study and practice together.