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Otogi 2 takes place directly after the events chronicled in the original Otogi - Myth of Demons. Like its predecessor, Otogi 2 is set in Japan and steeped in real-life folklore and mysticism. Raikoh, the famed undead warrior, managed to temporarily save the Japanese population from an onslaught of demons, but had not been able to vanquish them all before returning to his grave.