John Kreese, a karate school owner, seeks revenge against Daniel and Miyagi after his school's defeat. He turns to Terry Silver, a ruthless businessman and martial arts expert, for help. Meanwhile, Daniel and Miyagi's life takes a turn when their apartment building is demolished, leaving Miyagi without a job. Daniel decides to use his college funds to open a bonsai tree shop, a long-held dream of Miyagi's, and becomes a partner in the business.

The Karate Kid Part III
A former enemy, consumed by a thirst for revenge, teams up with a wealthy Vietnam War veteran who controls a toxic waste disposal company to exact revenge on Daniel and Miyagi.