Cobra Kai karate instructor John Kreese (Martin Kove) is still brooding over the defeat handed to him by Daniel LaRusso (Ralph Macchio) and Mr. Miyagi (Noriyuki "Pat" Morita). With his slimy partner, Terry Silver (Thomas Ian Griffith), Kreese plans an intricate payback that involves hiring a mean-spirited ringer (Sean Kanan) to rob Daniel of his championship title. When Mr. Miyagi refuses to train Daniel, even under threat, the boy makes the mistake of turning to Terry for guidance.