It all begins in Gotham city where Batman breaks up a counterfeiters ring who were planning to launder the phony bills through a casino. The leader of the group a man by the name of Chuckie Sol manages to elude Batman by running into a parking structure where he is confronted by the Phantasm whom he at first mistakes for Batman. He attempt to kill the Phantasm by shooting at it but bullets seem to have no affect. Chuckie in an act of desperation tries to run the Phantasm over with his car but ends up crashing through the Wall of the parking structure slamming into an adjacent building which kills him.
Batman arrives on scene and give chase to the Phantasm who manages to escape before he can even see the villain. Before leaving the scene Batman finds a clue in the form of a piece of glass from Chuckie Sol's car. Meanwhile one of Bruce Wayne's old flames is returning to Gotham by plane her name is Aundrea Beaumont. As the plane prepare to land she talks about meeting an old friend of her's by the name of Arthur Reeves for dinner that very night. Back at the Bat cave and begins analyzing the glass to which he find a strange chemical able to produce fog. The Phantasm next target is Buzz Bronski whom after a lengthy chase across a cemetery falls into an open grave and is crushed to death when the Phantasm pushes a staute of an Angel on top of him.
Bronski's bodyguards find his body and mistake the Phantasm for Batman a try to kill the Phantasm but again the Phantasm manages to get away. Later Batman comes to investigate the crime scene and finds the same chemical agents he found on Chuckie Sol's windshield. While at the cemetery Batman visits the grave of his parents and see's Aundrea visiting the grave of her mother she see's him as Batman flees she looks at the grave and correctly guesses that Batman is Bruce Wayne.
Later on Batman spies on Andrea and Arthur Reeves as they have dinner in a high class restaurant. Throughout the story Batman flashes back to when he and Aundrea were dating many years prior from the time they first met as well as when they visit the World of the future theme park and Bruce tries to stop a mugging much to the dismay of Aundrea. What is also shown is his marriage proposal to her which is ruined when a swarm of bats flies out of what will one day be the Bat-Cave.
Aundrea is forced to turn down the proposal after she and her father are forced to flee the country after he fails to pay off money he owed to the mob leaving Bruce and giving him the final push that made him Batman. The aged Leader of the Sal Velestra crime family that Buzz and Chuckie were once members of reads of their demise in the paper and fearing that Batman is the killer goes to the only person that he feels can protect him...The Joker who is hiding out at the World of the Future theme park.
After offering the Joker a large amount of cash he agrees to help him. Later the Phantasm breaks into Sal Velestra's mansion and prepares to kill him but Joker has beaten the Phantasm to the punch and has already killed him with his patented Joker Venom. The Joker then blows up the mansion but the Phantasm again manages to escape by jumping out the window just as the building explodes. The Phantasm is then chased by Batman in the Batplane across the rooftops of Gotham and the duo have their first battle after a few blows are exchanged the Phantasm tells Batman "Stay away this is not your fight!" and Escapes using a huge smoke cloud just as the Gotham Police Department arrives who think Batman is the killer. They chase batman to a construction site
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