Da Jui, or commonly known as The Hungry Ghost Festival, occurs on the fifteenth day of the seventh lunar month.
Da Jui seeks to pacify the ghosts of strangers, the lonely, the wondering and the uncared for.
According to the Chinese mythology, the gates of hell will open in the seventh lunar month. Spirits and ghosts are allowed to roam the earth and find the comfort they desire. Chinese street operas (wayang) will be staged to entertain these "guests", and it is believed that the front rows of seats would be taken up by the spirits and ghosts and so they would be left vacant.

The seventh lunar month is considered the most dangerous month of the year. It is during this time that the souls of the loved ones live close to the alive.
The souls can take up different forms, appearing as snakes, moths, birds, foxes, wolves, tigers and so on. They can appear as beautiful men or women to seduce the living. They can possess an individual by entering the body and cause illness and mental disorders. Ancestral spirits that are well fed and well cared for will bring good fortune.

Souls of those who died on their own, like in accidents such as drowning or even suicides, are denied entry into heaven. These souls search for other souls, even the innocent ones, to fill up their posts in hell. Special attention will also be given to the "hungry ghosts" and the "lonely ghosts" as they have no living descendants and can easily get bad-tempered and destructive during their "vacation" back to Earth. To prevent them from doing any harm to the living or the dead, the Chinese would use lanterns to distract them, or make sacrifices and burn "hell notes" or "paper replicas" for them to use in the underworld. This is done in a safe place outside their homes (to prevent them from coming in) to "bribe" these disturbed souls.
So you can tell that not only ghosts, even humans will benefit from this "vacation".
The Chinese have over the years become paper-mache craftsmen. They fashion complete wardrobes, cars, airplanes, furniture, money and other necessities of life out of paper, and these folk art forms are burned as offerings. This act of offerings gifts to the ghosts by burning such paper replicas generally takes place on the pavements and is quiet a colourful scene.

Everyone is constantly on the lookout for ghosts, as they can take on human form at will during this time. One way to spot a ghost is to look at their feet, because it is believed that their feet never touch the ground.

In China during the late summer, swimming pools and beaches are empty, the roads are uncrowded and no one seems to want to go outdoors after sunset. Weddings have been postponed and important business deals have been re-scheduled. An aura of fear and caution has engulfed the entire country. In Singapore, it being a more modern and culturally diverse country, people are less fearful (the pools and beaches are definitively not empty) but most of the traditions around the festival are still observed. So expect to se plenty of little fires where people burn their offerings, as well as little “altars” with food and incense sticks.

Found in the middle of the "Ghost Month", the Chung Yuan Festival is one of the most auspicious days. Huge spreads are set out in the temple courtyards, common corridors and even at homes. They are overflowing with sacrificial offerings of meat, fish, vegetables, canned foods and alcoholic beverages. Tall bamboo poles with hanging lanterns are erected at the temple gates to guide the ghosts to the banquets inside, and Chinese operas are performed non-stop to entertain the ghosts while they "dine." After the banquet is finished, the temples are filled with "tou teng" which are containers filled with rice and topped with symbolic evil-dispelling objects like knives, umbrellas and mirrors.

It is still a mystery how the Hungry Ghost Month came about. Taoists believe that the month honors the birthday of Yenlo Wang, the Demon King. Buddhists believe a legend about a man named Mu Lan who travelled to Hades to visit his recently deceased mother. She was evil and selfish on Earth, and when Mu Lan arrived he found her hungry and tormented. He tried to feed her, but the food turned to ashes every time it touches her lips. When he returned to Earth, Mu Lan asked his Buddhist master if his mother could be saved. The monk replied that she could only achieve salvation if Mu Lan could prepare food and drink offerings for all lost souls, and if all the monks and nuns chant and pray for her.

Word of warning for the Hungry Ghost Month:
During the seventh lunar month, be advised to be home early, preferably before dark. Look out for "white circles" on the floor and do not step on any incense or sacrifices. Try not to marry during this period, and no one should go for long or dangerous journeys, like sea voyages. And do not offend the dead.