In 1986 Yokosuka, Japan, the teenage martial artist Ryo Hazuki returns to his family dojo to witness a confrontation between his father Iwao and a Chinese man, Lan Di. Lan Di demands Iwao give him a mysterious stone artifact, the dragon mirror. When he threatens to kill Ryo, Iwao tells him the mirror is buried under the cherry blossom tree outside. As Lan Di's men dig up the mirror, Lan Di mentions Zhao Sunming, whom Iwao allegedly killed in Mengcun, China. Lan Di delivers a finishing blow and Iwao dies in Ryo's arms.