Shortly after his dojo's loss to
Daniel LaRusso in the 1984 All-Valley Karate Tournament, a furious
John Kreese attacks his student,
Johnny Lawrence, in the parking lot over the loss while the other pupils defend Lawrence. Miyagi intervenes and passively incapacitates Kreese, then threatens to strike a deadly blow but instead tweaks his nose. Seeing Kreese's humiliation, Johnny and the other students abandon him and Cobra Kai. Six months later, Daniel visits Miyagi after his senior prom and explains that
Ali has broken up with him in favor of a UCLA football player. Miyagi receives a letter notifying him that his father is dying, prompting him to return to his home village on
Okinawa Island. Miyagi tells Daniel that he fell in love many years ago with a woman named
Yukie. She was arranged to marry his best friend
Sato, son of the wealthiest man in the village and fellow karate student of his father. Upon announcing his intentions to marry Yukie, Sato challenged him to a fight to the death. Instead, Miyagi left the country. Daniel decides to accompany him back to Okinawa. Upon arrival, Miyagi and Daniel are greeted by
Chozen Toguchi, who drives them to one of Sato's warehouses and reveals that he is Sato's nephew. Sato appears and demands that Miyagi fight him, which Miyagi adamantly refuses. Arriving at the village, Miyagi and Daniel are welcomed by Yukie and her niece
Kumiko. They discover that Sato has become a rich
industrialist whose
supertrawlers have destroyed the local fish population, impoverishing the other villagers. They are forced to rent property from Sato, who owns the village's land title. Yukie reveals that she never married Sato because of her love for Miyagi. Miyagi's father dies, and Sato gives him three days to mourn out of respect before their fight. Miyagi shows Daniel the secret to his family's karate – a
den-den daiko (handheld drum) that twists back and forth, illustrating the "drum technique", a counter-striking karate move that Daniel begins to practice. Daniel and Kumiko begin to develop a romance. Daniel unintentionally exposes corruption in Chozen's grocery business during an encounter in the village. Chozen accuses him of insulting his honor, and they have a series of confrontations. The feud escalates when Chozen and his cronies attack Daniel and vandalize Miyagi's family property, but Miyagi fends them off. Miyagi and Daniel plan to return home before the situation worsens, but Sato threatens to destroy the village if Miyagi refuses to fight. He finally agrees on the condition that Sato relinquishes land ownership to the villagers, and Sato agrees. A typhoon strikes the village on the day of the fight, forcing everyone to seek shelter. Sato's dojo collapses, leaving him trapped in the wreckage. Miyagi and Daniel rush to rescue him, and Daniel later ventures back out to save
a child trapped on a nearby bell tower. Sato orders Chozen to help, but when he refuses, he rushes to assist Daniel. He publicly shames his nephew and disowns him, and an enraged Chozen runs off into the storm in disgrace. Sato returns the next day with a work crew to help rebuild the village, asking Miyagi's forgiveness and handing over the deed. He also agrees to host the
O-bon festival in a nearby ceremonial castle, inviting Daniel to join. During the celebration, a vengeful Chozen ziplines into the presentation and takes Kumiko hostage, demanding to fight Daniel to the death. Daniel fights bravely but is eventually overwhelmed by Chozen. Miyagi, Sato, and the crowd respond by twisting den-den daikos in unison, inspiring Daniel to use the drum technique to defeat Chozen. He then grabs the vanquished Chozen and threatens to end his life, who urges Daniel to kill him. However, mirroring how Miyagi handled Kreese earlier, Daniel instead playfully tweaks Chozen's nose and drops him to the ground. The onlookers cheer as he and Kumiko embrace as Miyagi and Daniel exchange a smile. ==Cast==