At the start of this stage you will have to move up some steps by jumping. There is nothing here enemy wise that you haven't seen before, but be on the look out for the ninjas. These enemies will keep warping in and can hit you from above with their leaps. There is no way you can miss any of the hostages in this stage.
After making it to the top, you'll eventually have to descend some steps. There are several soldiers here, so take your time and use Yamato when you can. Towards the end of this stage there are several jumps to make over bottomless pits. Some ninjas and other enemies will drop down, but many of them will just fall to their own deaths.
The next part of the round takes place in a much darker part of the cave. There are some areas which are completely pitch black, and many enemies can be hiding in them. You are going to have to make good use of Yamato here, as he'll start barking even if you can't physically see an enemy.
Towards the end of this stage many ninjas will start warping in, and it can be extremely difficult to tell where they are and where they are going to land from their jumps due to the darkness. If you see one leap, just move in the opposite direction for a short distance to avoid being hit. Towards the end of this stage a couple of troops will run from behind, so be ready to turn around and take them out.
The Wheel of Fire is the boss of this stage. Surprisingly if you make contact with it, you won't die. The boss will circle around the stage, occasionally stopping to release several fireballs. Make sure to be a decent distance away from the boss when it does this as the fireballs can cover a large area.
To hit the boss, you need to throw a shuriken at the center of it. You can only do this just before the boss stops and uses the fireball attack. When it does this attack, it cannot be hit, so you need to throw quickly and accurately. The boss has no other attacks aside from the fireballs, and the only other way you can die is by falling off the platform -you can fall off at the left, but you are safe at the right.