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Bart (Bob Hoskins) is a vicious loan shark whose method of persuading men to pay him back involves Danny the Dog (Jet Li), a man with the mentality of a child and a dog. Danny is a violently skilled fighter who stops at nothing to take down his targets, but only when a metal collar around his neck is removed by Bart. Once the collar is on, Danny is a harmless, withdrawn person, with very little knowledge of how to live as a socialised person, and he is constantly bullied by his master Bart.
One day, Bart realises he can end his loan shark career by regularly attending an underground fighting tournament and registering Danny to fight. If Danny wins, Bart receives a hefty prize money. After the first fight, however, Bart gets into a mishap with another criminal and is left for dead after a violent shooting. A critically injured Danny returns to an antique warehouse for shelter, where he is found by a kind, blind piano tuner, Sam (Morgan Freeman). Danny soon finds himself with Sam and his stepdaughter Victoria (Kerry Condon) in their apartment, and he starts a new life with the benevolent family; curiously he is drawn closer to music while spending time with Victoria. He also develops curiosity about who his mother was when he learns what a family is.
Weeks later Sam informs Danny about moving back to New York, where he and Victoria are originally from. He invites Danny, telling him they think of him as family, and Danny happily accepts. However, Danny runs into Bart’s right-hand man Lefty in the streets and is forced back to Bart, who is still alive. Bart drags Danny back to the underground arena, where a death-match is set between Danny and ruthless martial artists. Despite Danny’s pleas, Bart shoves him into the pit, where he is pummeled by four fighters. Danny eventually retaliates but refuses to kill them. Enraged by Danny’s change of character, Bart drags him back home and shuts him back to his cage. That night, however, Danny sneaks through his door and goes through photographs of Bart’s favorite prostitutes, finally finding one snapshot of who appears to be Danny’s own mother. He interrogates Bart, who tells him that she was simply a prostitute who is long gone. He angrily promises to make Danny repay him for the money he had lost earlier that evening.
Next morning, however, Danny manages to escape and runs back to Sam and Victoria, telling them what he had learned and where he was. With the two's help, Danny regains memories from his childhood past: his mother was a music student with no money, so she offered herself to Bart to get some to pay for her lessons. But one day, Bart shot her when she defied him. Bart has been raising Danny ever since, not as a human being, but as a dog.
Bart and a large gang of thugs arrive at Sam's apartment building to capture Danny. Frantic, Danny hides Sam and Victoria in their closet, and he runs out to take out the thugs all over the building. He faces off against an attacker with skills similar to his own; Danny eventually causes him to fall to his death on Bart's car. A vengeful Bart pursues Danny through the building with a gun, finally catching him in Sam's apartment. He threatens to pull the trigger, all the while telling him that he was never meant for a different kind of lifestyle. But he drops the gun and instead takes out a collar, telling Danny to come home. Danny slowly advances toward the collar, but stops Bart at the last minute and disarms him. He proceeds to furiously beat Bart, causing Sam and Victoria to burst out and frantically beg Danny not to kill; however, a defeated Bart orders Danny otherwise. Bart tells Danny he will always be an animal, to which Sam responds by smashing a flower pot on his head, knocking him unconscious. Sam, Danny, and Victoria embrace having calmed Danny's rage.
Some time later, Danny is with Sam at a piano recital at Carnegie Hall, where Victoria is getting ready to perform. Realising Victoria is playing what his mother played years ago, Danny sheds a happy tear.