It's summer, Daniel just broke up with his girlfriend and was told by his mother that her job needs her to move to Fresno for the summer which Daniel doesn't like. Mr. Miyagi was going to let Daniel stay with him until he receives a letter from Okinawa telling him that his father is dying. So Miyagi leaves to go there and Daniel joins him. Miyagi tells Daniel that the reason he left Okinawa was because his best friend, Sato whose family is the most affluent in Okinawa, was promised Yukie whose the girl Miyagi loved. So Miyagi asks her to run away with him and when Sato learned of this, he challenged Miyagi to a fight to the death. So Miyagi left. Upon arriving Miyagi discovers Sato still wants to fight him and his nephew and best student Chozen has it out for Daniel.