Goodbye, Dragon Inn is set in the approximately ninety minutes of the last feature at an old Taipei cinema that is closing down, showing King Hu's 1967 sword-fighting classic Dragon Inn. Only a few people are present in the cinema, and a variety of subplots are developed around them. Throughout the film, the ticket woman tries to find the projectionist, searching for him in order to present him with a steamed bun. A young Japanese tourist wanders around the cinema in search of a homosexual encounter. An older man tells him that the cinema is haunted. An old man, who was one of the actors who appeared in the original Dragon Inn, watches the film with tears in his eyes. Outside the theater, he encounters an older man who had been watching the film with his grandson; this man also starred in the original film. The film is shot with almost no camera movement, most shots lasting well over thirty seconds. There are only about a dozen of lines of dialogue.