In 2018, Johnny Lawrence lives in dreams of the past and how his life was great until Daniel LaRusso beat him in a karate tournament. Now Daniel owns a successful auto group and Johnny gets by on menial jobs. But things change when Johnny sees a teenage boy beat up on by bullies.
Daniel finds out about Johnny's new dojo and realizes that he's lost the balance that he had in the past. Meanwhile, Johnny deals with his own errant son while training Miguel.
Johnny starts Miguel's training in earnest while beginning an online promotion of his dojo. Meanwhile, Daniel volunteers to chaperone the school Halloween dance to keep an eye on Samantha but comes face-to-face with a skeleton from his past.
Someone defaces Daniel's dealership billboard, and he suspects his rival. Meanwhile, Samantha learns the truth about Kyler, and Johnny has eye-awakening meetings with his son and ex-wife.
Daniel schemes to raise the rent on Johnny's dojo, forcing him to leave. Meanwhile, Miguel puts Johnny's training to use, and Robby gets a job after seeing his father with Miguel.
Robby puts up with hazing by Louie, and Daniel takes pity on him. Meanwhile, Johnny discovers that students have changed in the last 30 years and remembers his own childhood.
Johnny and Miguel give each other advice, on getting the ban lifted on Cobra Kai from the All-Valley Tournament and dating Samantha. However, Daniel has something to say about Johnny's attempts to get Cobra Kai in.
While training with Daniel, Robby gets closer to Samantha and Miguel notices. Meanwhile, Johnny tries to make amends for his past.
Amanda forces Daniel to give Johnny a new car to replace the one Louie burned up, and Johnny and Daniel bond over their common upbringings. Meanwhile, Miguel suspects that Samantha is cheating on him with Robby, and Daniel finds out that Robby is Johnny's son.
Cobra Kai fights in the All Valley Karate Championship, and the final match comes down to Miguel and Robby. Each of them put their sensei's lessons to use but only one can emerge the victor. Afterward, Johnny receives a visit from a figure from his past.
