In the past, Goutetsu instructs the young Gouken and Gouki. Gouki is drawn to the power of 'Satsui no Hado'. In the present, Ryu and Ken try to create their first Hadouken. Gouken is disturbed by Ken's approach and they argue. Ryu and Ken learn more about the history of Ansatsuken, their master Gouken and his dead brother Gouki.

Ryu is disturbed and sees a foreboding stranger in his nightmares. Ryu and Ken sneak out for adventure at the G.I. Bar. Ken's father makes a surprise visit. Ryu is unsettled by the old Dojo.

Gouken and Gouki vie for Sayaka's attention. Gouki uses 'Satsui no Hado' in a sparring match almost killing his opponent. Goutetsu gives Gouki an Ultimatum after his abuse of Satsui no Hado. Gouki and Sayaka part.

Ryu and Ken continue to work on their Hadouken, but Ryu is troubled and refuses to fully manifest his. Something is learnt of Ryu's past. A mysterious stranger appears to Gouken.

In the past, we see events from Gouki's perspective as he finds a new home. Gouken and Sayaka become estranged.

Goutetsu and Gouken consult the Ansatsuken scrolls and discuss Gouki's departure. They question the very real potential of Ansatsuken myths becoming reality. Goutetsu confronts a dark presence.

More is learnt of the fate of Goutetsu, Gouki and Sayaka. Ryu and Ken train, their techniques and Hadoken become more advanced.

As Ryu and Ken' training approaches a climax, Gouken sets them a 'rite of passage' which will culminate in the greatest challenge of their lives.

With a near fatality, tensions are high as Gouken is forced to make the hardest decision of his life as an outside force draws closer. The Dojo will never be the same again...