After dealing with the bandit ship in the Two Rivers, and winning the duel against Gao the Lesser in the Two Rivers School, Master Li will send you into the Spirit Cave to search for answers about your heritage and the truth behind the corruption of the spirit realm.
As you walk down the path set before you, you will soon arrived at a barred gate bearing a clay seal with a message carved by Master Li. Once you've read the message, the seal will shatter causing the gate to swing open.
When you approach the pillar found in the center of the chamber, it will shatter and your character will obtain the first piece of the Dragon Amulet from within it. Being a Spirit Monk, you are able to tap into the true potential and power that essence gems posess by using this artefact.
After you equip the Flawed Warrior Gem (this flawed gem provides minor bonus to your Body) that comes with the amulet, you will be attacked by three spirits. As they are not hard, the fight should be quick and easy. When the fight has ended, you can smash two vases located in the chamber to obtain a small stash of silver coins from each. Then move on to the next sealed gate.
Second Sealed Gate:
The gate is identical to the first, and bears yet another clay seal. This time, the inscription carved by Master Li is not at first readable, but once you hold the amulet up to it, words form and you are offered more advice about your importance in the world.
Third Sealed Gate:
Walk down the short path until you arrive at another sealed gate. Master Li's words are clear, and once you've read what they say, the seal will shatter, allowing the gate to swing open.
The spirit of Two Rivers' former master will approach you here and tell you about how he can't reach the Underworld because there is no "shepherd" to guide him. He decides to take his anger out on you, with the help of two restless spirits. The Old Master uses the Ice Shard style, so you'll probably have to deal with the style's slowing and freezing abilities if you are hit. It can mostly be avoided if you don't stay in one place. Doubl-tapping the W, A, S and D keys can prove useful to evade his attacks. Focus your attention on the Master, once he is finished, the two restless spirits are easily dispatched by themselves.
When the fight is over, your character will approach a scrollstand and begin to meditate, and you'll be teleported to another area for an audience with a blue female spirit. When you return, a portal will be opened that transports you back to the Two Rivers School. Don't leave before collecting the items from various places.
The Water Dragon:
Though your character doesn't know it yet, the blue female spirit that you speak to is in fact the Water Dragon (the Jade Empire goddess responsible for moisture and the shepherding of the dead to the Underworld). She tells you that she is cut open, and that is why the way to the Underworld is shut. You are the only one who can restore the balance of things, so she offers to aid you by teaching you either the Ice Shard style or the Dire Flame style. You should choose carefully, because the alternate style will not become available to you until late in the game.
When your audience with the Water Dragon has finished, you will be transported back to the chamber where the portal leading to the Two Rivers School can be found.
A spirit font can be found in the chamber, that you can use to replenish your character's Body and Chi.
After collecting all the items, walk into the portal to be transported back to the Two Rivers School.