Daniel is new in town, and is getting picked on by the local bullies, who all are adept in karate. Determined to stick up for himself, Daniel begins to teach himself karate, only to discover that the caretaker at his apartment seems to be a grand master in karate. Agreeing to teach Daniel, Mr. Miyagi shows Daniel that there is more to karate than violence, and perhaps the best way to solve the problem he has with the bullies is in the All Valley Karate Championship.