After having killed extortionist Mayil Vaaganam in the first film, Durai Singam (Suriya) has gone undercover after meeting the Home Minister, Ramanathan (Vijayakumar) and is working as an NCC officer in a school in Thoothukudi. The only people who know about this operation are the Chief Minister (K. Viswanath) and Ramanthan. Sathya (Hansika Motwani) is a student who falls for Durai Singam though he is waiting to marry Kavya (Anushka Shetty), his love interest. Durai Singam's father, Soundara Pandi is angry about him leaving the police force and refuses to speak with him. He also forbids the marriage between Durai Singam and Kavya, as he fears Kavya's father Mahalingam (Nasser) might take Durai Singam away to manage his business empire and that Durai Singam will lose respect within his relatives.
Susai (Santhanam), a local who works in the same school shows Durai Singam parts of Thoothukudi and tells him about the rogue elements dominating the area helping him in his surveillance. He requests Ramanathan to transfer Erimalai (Vivek) and another cop to assist him. Sathya's moves are frequently repulsed by Durai Singam who learns that Sathya is the niece of rich exports businessman Thangaraj (Rahman). Bhai (Mukesh Rishi) and Thangaraj, pretend to be enemies, but are two criminals who control the south-east coastline of Tamil Nadu. Bhai and Thangaraj have connections with an international gangster and drug lord Danny (Danny Sapani), and are trafficking cocaine. Durai Singam doesn't know about their connection and keeps Bhai in his off duty surveillance.
One day, due to a verbal fight in a pub, Bhai's chief drug importer, Saghayam (Rajendran) kidnaps a girl from another caste and holds her ransom until sunset and then releases her to damage her family name. This causes a communal problem in the city, and Durai Singam's school principal is advised to close the school for the day. With his info connections, Durai Singam learns of the problem, and takes charge as new Deputy-Superintendent of Police for the urban, and rescues the girl. He is lauded by the press and his father forgives him. Meanwhile, Sathya learns that Kavya and Durai Singam are strongly in love and distances herself from them.
Then Durai Singam finds out about Thangaraj and Bhai's partnership. He plans to arrest Saghayam first, gathering evidence while Saghayam is out to sea, and waits to arrest him at the harbour. But Saghayam is bringing Danny with him to attend Thangaraj's new hotel's party. Sagyam is arrested by plan, and Durai Singam arrest Danny without knowing his identity, but due to lack of visa. Thangaraj tries multiple power levels to make Durai Singam release the duo, but it is not of any use. Finally they take Durai Singam to his superior's office, and then break open his station to release Danny and Saghayam. Durai Singam finds that Danny has escaped, the police station in ruins, and his fellow officers injured. All of Durai Singam's effort is spoiled due to his superior and the next morning he is suspended for unruly behaviour. Though without power, he warns Bhai that he knows about Danny and will return soon.
Durai Singam meets Ramanathan at Chennai, and plans an operation to eliminate all gangs. He then gets re-appointed and gets his superior suspended. He gets authorization to kill drug dealers on sight even without evidence. Since the next load of drugs is ready to be delivered by Danny, Bhai decides that Saghayam will deliver the drugs to him in Kerala, and he will bring it back. But he is arrested by Durai Singam, drugs in hand.
The next day, at Durai Singam's engagement function, a former adversary, Harbour Shanmugam informs him that Thangaraj has hired goons to attack his home at night and kill everyone. Durai Singam foils that plan also, by breaking his gun, giving it in the armoury and then killing the goons single-handedly. Durai Singam then places a drug bag insides Thangaraj's house and arrests Thangaraj and jails him. After a moment, Durai Singam gets a phone call from someone to inform him that Sathya has died. He rushed to Thangaraj's house and there, he sees Sathya lying dead in her bed.
He further analyzes that Sathya was killed by her own dad who poisoned her. Depressed and guilt ridden, Durai Singam seeks permission from Kavya for moving to South Africa as his marriage will take place in 3 days. Meanwhile, Durai Singam traces Danny to South Africa to do drug business again. Durai Singam goes to Africa to arrest Danny, and locks him in the same cell from where Danny had escape.
