Naruto heals his wounds with an ointment given from Hinata, as his opponent Kiba, leaves defeated. Naruto believes the medicinal ointment was very helpful as his wounds immediately vanish as it is applied. Naruto offers a bit to Sakura, but she stares at it. Kakashi looks down at Naruto's hands healing dramatically fast. He realizes that it's not the ointment that is healing him, but the Nine-Tails.
Then it goes to Kiba and Akamaru who are being taken away defeated, by the Medical Nin. Hinata approaches them and asks the Medical Nins to use her ointment on them.
Kiba does a strange amused chuckle and tells her she should worry about herself. He then warns her to give up if she should ever be matched up against Gaara or Neji.
Time ticks away as the next two fighters are being announced. It is Hyuga Hinata and Hyuuga Neji. Hinata Turns shockingly around at Neji. The two approach each other. Neji didn't think he would have to fight her. Then Hinata calls him her brother.
Hinata and Neji are related! However, they are not siblings. They both come from Konoha's Oldest Noble Family, the Hyuuga Clan, which is descendant from the Uchiha Clan. They are related because they both come from Hyuga's head family and branch family.
Hinata is from the head family who are the founders while Neji is from the branch family who carry the same bloodline. The two will not feel that bad about fighting each other since the head and branch family have been on bad terms.
It has to do with the special abilities of the clan. The Hyuuga Clan has special rules when it comes to passing on the ability. Those rules are favorable to the head family. And that is the reason for their dislike of each other.
They are asked to start the match. Neji warns Hinata that she should give up because she is not suited to become a ninja. He says that she is too kind, seeks harmony, and avoids trouble. She just goes along and follows other people's ideas.
She has no self confidence and always feels inferior. He explains that this is why she thought it would be fine to remain a Genin. He says she was peer pressured to participate in the Chuunin Exam in order for her team mates to participate. They needed to be a team of three in order to be eligible. He then asks if what he says is wrong. Hinata denies it and replies that she wanted to change herself. Hinata's leader, Kurenai watches.
She then has a flashback of Hinata. Her younger sister, Hinabi, is on her hands and knees on the floor, breathing hard, and holding a kunai (throwing knives). Her father tells her to stand up. Kurenai is there. She is informed that she shall be Hinata's Sensei from Hiashi (Hinata's father). Then she asks if it is okay with him because she is the Hyuuga family's successor and will possibly face death in Genin missions. He replies that she can do whatever she wants with Hinata.
He considers her a defect because she is weaker than her sister, Hinabi, who is five years younger. She is not needed in Hyuuga. He then tells Kurenai to leave. As she is leaving she notices Hinata outside the door. She has heard everything. Back to the present. Kurenai knows Hinata is trying hard to change herself.
Back at the fight Neji calls Hinata a spoiled child because people cannot change. A failure is a failure. Their personality and power will not change. Saying this pisses off Naruto. He continues to explain that people cannot change. That is the reason terms like "elite" and "failures" exist. Everyone judges you by how good your face, head, abilities, body shape, and personality are. There are things that cannot be changed. People suffer from their limits and live.
Just like the fact the he is from the branch family while she is from the head family. They cannot change that. Naruto is starting to shake with fury. Neji continues and says his Byakugan has seen many things. And this is why he knows. She is just trying to be tough. And what she is really thinking is how she wants to leave the place right then.
Hinata continues to deny it. Sakura is curious and asks about the Byakugan. Byakugan is a bloodline limit that the Hyuuga family possesses. It is similar to the Sharingan, but is stronger in regards to insight Lee said, with accuracy.
Neji reveals his Byakugan. His eyes have developed veins around his eyes and on his pupils. He then says that Hinata cannot fool his eyes. From what he observed of Hinata's reactions he says that she was recalling a harsh past event.
She is imagining physical and mental pain. He says she is thinking about her old self and has predicted the outcome of this match from previous experiences.
A prediction that she will lose. He says she now knows that she cannot change. Naruto has now exceeded his limit of the amount of verbal abuse he can watch. He yells that she can change. He tells Neji not to label people.
He motivates Hinata to beat him up and speak up because it is making him angry. Hinata is oddly inspired and reveals her Byakugan. She won't run away anymore. She gets into a fighting stance and tells Neji to fight her. They both use the same Hyuuga fighting Their hands are illuminated by a blue glow.
They begin to strike at one another with amazing Taijutsu skills. Hinata almost hits Neji, but he barely dodges. Naruto and the rest of the gang wonder if the last one hit. They realize it didn't. Lee explains that even the slightest tap will cause a lot of damage.
This is why they are called Konoha's noble family. Hyuuga is a special hand to hand combat passed from generation to generation. Lee's aims to break bones and create external wounds, damage on the surface.
It is called Gouken. Hinata and Neji's Hyuga, attempts to damage the Chakra circulatory system inside an enemy. It destroys internal organs and inflicts internal damage. This is known as Jyuuken. It's not flashy but it will hurt later on. There is no way to train your internal organs so if you get hit, no matter how strong you are, it will be fatal. The fight continues. Naruto being the slower one finally asks what the chakra circulatory system is.
It is like the blood circulatory system except with chakra. It's a path for Chakra. Those paths are closely intertwined with internal organs that mold Chakra. So a hit will hurt your internal organs as well. Outside and Inside damage. Sakura then hits Naruto for not asking her. Their eyes which possess the ability of Byakugan enable them to see the chakra circulatory system. Then Hinata and Neji have finally hit each other. All the other teams wonder who was able to evade it and who was not. The episode then comes to an end.