Chief Xiao kills himself after giving the Xuanbing Lotus Stone to Xiao Bai to help him master the final saber technique. Chief Li attends his funeral and reveals the history between Chief Xiao and Shangguan Hui, who saved Chiefs Li and Xiao and who happens to be from the Demon sect. Though she is innocent of evil doings, she dies at the mercy of the righteous sects trying to eradicate the demon sects. It is not yet clear what the relationship is between Shangguan Hui and Shangguan Qiu Yue. (Source: frankly at kisskh)