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Daniel and Johnny both find their own paths to training their students, with Kreese observing Johnny's methods.
After Miguel wins the championship, an old friend stops by Cobra Kai to congratulate Johnny. Daniel and Robby prepare Miyagi-Do and get a second student.
Johnny manages to get onto the Internet and sees Daniel's ad for his new dojo. The two dojos choose the local ValleyFest to demonstrate their skills and one-up each other.
Johnny continues building a new life, but a face from his past could disrupt his future. Meanwhile, Daniel opens a Miyagi-Do studio to rival Cobra Kai.