The film tells the story of a young Javanese man, Ahmad, who leaves his village with a magic protective dagger given to him by his mother. He takes to the seas, eager to discover the world. He reaches the exotic Arabian coast, and travels all the way to Egypt, encountering belly dancers, harem women, etc. He meets Princess Nilam and falls in love. Nilam's father will allow Ahmad to marry her only if he brings back a blue diamond guarded by monsters at a faraway location.

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