Sakura and an exhausted Kei arrive at the dojo. But Sakura finds out from the caretaker that the man she is looking for has just left -he and his friends went a few minutes ago, and are heading to Kabuki Town. Sakura says she won't give up, as she doesn't want to rest a minute until she sees that man again. She runs back the way she came.
Kei collapses and says she gives up. In Kabuki Town, Ken is trying to find out where the competition will take place, but the tall buildings stop him from being able to connect his laptop to the Internet. He runs off to try and find a better area, as Ryu and Shun go on without him.
Shun asks Ryu to fight in the tournament, but he says he can't right now. Shun says he's heard great stories about him, like how he beat Sagat. Shun really wants him to enter, but Ryu says he can't right now. Shun says if you are strong, you just have to fight! Ryu says he can't, so Shun kicks over a trash can. Ryu doesn't seem to agree with this, but then some guys come over. They've heard that Shun wants to fight, and aren't pleased that he just kicked over a trash can.
They've picked the wrong fight, as Shun immediately fights two of the guys, whilst Ryu takes the other down with ease. But Ryu watches as Shun continues to pound away at his opponents, and he seems to be enjoying it.
Shun walks up to one of the defeated guys, ready to start hitting him again, but Ryu steps in. He punches Shun and makes him fall down. Shun asks why, but Ryu tells him he already said. He mentioned earlier that if you are strong, you must fight. Ryu then says he himself is not strong... which is why he must fight. He fights against himself. He helps Shun back up.
Just then, Chun-Li and Wallace walk round the corner. Nearby, Sakura enters a bar, and asks about a tournament being held around here. The bartender thinks she's cute, whilst a couple of creepy guys say she wouldn't want to see that. She should stay here and play with them.
Sakura realizes they don't have good intentions for her, and tries to attack them. But her jumping spin kick doesn't come out right, and misses. She crash lands, and doesn't understand -she's seen that move work before. But then the men come over and say they should play some more. They start to carry her away, when a door to a phone booth then suddenly opens and sends one of the guys flying.
A kick then sends the other guy crashing into a stool. Ken has appeared, and whilst he's saved Sakura, she only finds his moves not half bad! Ken is surprised by her reaction, but then she asks him if he knows a guy with a bandanna on his head, like the one she has. Ken thinks she must mean Ryu.
Ryu's group arrive in a building where the tournament is being held. Ryu introduces himself to Chun-Li, but she says she already knows who he is -he's the man who defeated Sagat. She asks him if he's competing in this too, but he says he's not. He asks her if she's competing, but she says she's here on business -she's hot on someone's tail. Outside, Ken and Sakura arrive at the building, and Sakura is disappointed to see that Ryu isn't here, despite Ken saying he would be. Ken says he was here a minute ago, and Sakura thinks maybe he's inside. She and Ken enter the building. Inside, a fight is taking place: Vega versus Dan.
The fight is totally one sided, with Vega slicing up Dan easily. Sadler is watching, but then notices that Ryu has entered the building. Meanwhile, Vega finishes off Dan.
Ken finds out that he can't take part in this competition, as the registration has closed. Ken can't believe it, as he came all the way to Japan for this, but Sakura thinks he should just give up. Meanwhile, Shun's first fight is about to begin. His opponent is Zangief, a huge Russian wrestler.
Despite his opponent being several times bigger than him, Shun lands several powerful strikes on Zangief, and then slams him to the ground.
But Zangief is far from done, and smacks Shun away. He then grabs him by his head and slams him into the ground. Sakura us watching, and reacts in shock at what street fighting can really get like.
With Shun floored, it looks like Zangief is the winner. But Shun suddenly gets back up again, and there is something different about him -Ken says it's the dark hadou, and Sakura is amazed by it.
Ryu has also realized it is the dark hadou, and Chun-Li asks him what is it. He doesn't respond, and watches as Zangief runs over and kicks Shun away. He then gets behind him and puts him in a hold.
He leaps back to throw him, but never gets the chance thanks to Ryu entering the fight. Ryu kicks Zangief, causing him to drop Shun. Ryu tells Shun that's enough, and to stop it. Zangief then runs towards them, so Ryu goes off to fight him. He tries a jump kick, but Zangief leaps up.
He grabs him and performs a spinning pile driver, before stomping on him. The dark hadou then overcomes Shun again.
Zangief goes over to him, and knocks him down. He then just starts stomping on him over and over again. As the dark hadou possesses Shun, it also takes control over Ryu.
Zangief notices that Ryu has stood back up. He charges towards him, but Ryu starts to prepare a fireball. Ken yells for him not to do it, and as Ryu throws out his projectile, it just misses Zangief.
It ends up totaling a large chunk of the building, causing part of it to collapse. Sadler has watched everything. He has seen Ryu's powerful abilities, and wants them for himself. He summons his aide, Rosanov. Meanwhile, Ken finds that Sakura has been hurt. She claims she's fine, but she finds she can't stand. Ken realizes her leg is broken, and tells her he'll carry her out.
Zangief has survived, although doesn't have a clue about what's just happened. The ground he's on then gives way, and he plummets down. Ryu finds Shun and says that was the dark hadou. He wants to know who he learnt that from, and Shun says that he learnt it from his dad, who also used the dark hadou.
Ryu takes this in... could it mean... Akuma? Before he can think about it any more, Rosanov drops in.
The two start fighting, and Ryu is able to evade Rosanov's attacks. He lands several strikes on him...
...but Rosanov doesn't seem to show any signs of feeling pain. Rosanov then reveals he has a cybernetic eye, and can also fire energy blasts from his hand.
Ken says this is too dangerous, so they'll get out of here. Sakura asks about Ryu, but Ken says he'll be fine. Sakura says she's sorry for getting hurt, as if she didn't, he could go and help Ryu. Ken tells her to forget it -ladies always come first in his book. He carries Sakura out of the building. Meanwhile, Chun-Li tries to attack Rosanov, and throws a kikouken at him.
However he deflects it back at her, then kicks her into a wall. Ryu tries throwing a hadouken at him, but again he's able to deflect it.
Rosanov tries using his own energy beam attack, but Shun gets in the way to stop it. Shun passes out, but Ryu catches him as he falls.
Ryu then succumbs to the dark hadou once again. Rosanov rips his jacket apart, and tells Ryu he'll give him a taste of his power. Chun-Li feels that strange ki flow again, and thinks she's never felt such an enormous ki before.
Rosanov watches as Ryu charges up a projectile, and tells him this fight is over. He starts sending energy blasts at Ryu, but Ryu avoids them, all whilst making his way towards Rosanov. He gets right up to him, and throws out his projectile.
The blasts blows Rosanov away, and Ken and Sakura see another large explosion at the building. Chun-Li finds Shun, and finds that he's still alive.
Ryu sees that was the dark hadou, and wonders if he is going down the same path as Akuma. Just then a helicopter appears, and shoots at Chun-Li. She has to move away from Shun.
Some guys drop out of the helicopter and place Shun in a net. The helicopter then moves away, taking Shun with it. Chun-Li finds Ryu and slaps him. She tells him to pull himself together, as Shun is still alive -just barely. Later on, Ryu stumbles through the streets, thinking about the dark hadou. He bumps into a couple of people without saying a word, and they don't take kindly to that.
They beat Ryu up and smash a bottle over his head, and then decide to get out of there. Chun-Li then finds Ryu.
Ryu is taken back to the Interpol HQ, where Chun-Li and Wallace ask about the dark hadou. Chun-Li realizes that Sadler must be after the powerful dark hadou, and since Shun could use it, it must have been why he was taken. Ryu says nothing, as Chun-Li says she thinks Shun will have been taken to Sadler's lab. And at Sadler's lab, Shun is being put through great amounts of pain!
NOTES
-Rosanov's name is never spoken, it comes from the credits. It's spelt "Rosanof" in the English credits, which is not quite the right spelling, according to the SF wiki.
-It's not clear if Zangief actually survives, as he's not seen again after he falls.