A peaceful scene of a waterside home, and inside this home we find Kakashi coming to and a woman asks how he is doing. The three Genin enter with Tazuna, happy to find Kakashi awake, they all wonder about the happenings of the past few days. As Kakashi thinks, he explains the job of the ANBU. It then pans to the masked boy and the body of Zabuza, as the boy goes to remove the bandages from Zabuza's face, he reaches up and holds the boys arm. Doing it himself, Zabuza's mouth is filled with sharp shark like teeth, and pulls out the two long needles from his neck.
We find out that the boy is not really ANBU, and that him and Zabuza might have a more then "friendly" relationship with each other. The boy is rather feminine in appearance and talks to Zabuza in a very loving manner. Due to the injuries sustained, Zabuza won't be able to move much for a few weeks. It also it appears that Zabuza knows how to beat the Sharingan the next time he faces it. Getting a bad feeling, both Kakashi and Sasuke come to the conclusion that Zabuza is not dead and the boy was actually helping him to escape.
Kakashi explains how first of all the bodies are destroyed on site, and secondly that the boy used a nonlethal weapon on him. Having said this, Naruto is ecstatic at the possibility of getting to prove his worth. Sakura is afraid due to Kakashi's condition. But he reassures her that they are going to go through training and that there growth is amazing, especially Naruto. It is at this point in the story that Inari, Tazuna's grandson, comes in and he states that the group is going to die by the hands of Gato and that there is no hope.
Naruto being himself, proclaims his dream of one day becoming Hokage and that he is a super hero. Inari shoots him down, in doing so pisses Naruto off and Sakura has to hold Naruto back. Inari claims that if they don't want to die they should go home and then he heads out to watch the ocean. Naruto unsatisfied goes looking for him to yell at, and finds him in his room sitting on a table sobbing about his father and holding a picture. Coming upon this scene, Naruto lowers his head and walks away.
The four Konoha ninjas gather in a small clearing in the forest. Kakashi in crutches, elaborates about their training and asks Sakura to educate them on what exactly Chakra is. She uses a scroll to explain that Chakra is the mix of energy from the body and the spirit, and by forming hand seals and "molding" the chakra you perform all of the techniques that you use. Kakashi praises her on her knowledge and Naruto and Sasuke agree that you can learn using your body instead of your brain. Finding out from Kakashi that because they do not understand the mechanics of what they do they cannot fully utilize their chakra. They will be training to learn how to better use their chakra by climbing trees.
It sounded simple enough to Naruto and Sasuke, the three must climb the trees without using their hands. They must climb the trees by running up them. Kakashi demonstrates this by gathering chakra at his feet and then he proceeds to walk crutches and all up the tree until he is completely vertical. Looking on in amazement, the three prepare for their turns. He tells them by doing this they will strengthen their abilities to control the amount of chakra they use.
He throws them each a kunai and tells them to mark how far they get. In his common attitude, Naruto states he is the best and charges ahead. The first time around Naruto goes nowhere and Sasuke gets a little more than half way to the first branch. Sakura goes all the way to the first branch with no problem at all. Upset that Naruto complimented her and Sasuke did not frustrates her, Kakashi toys with the boys to motivate them and Inari looks on from the distance.
Back at the tree house from before we find Gato once again taunting Zabuza. Zabuza, lying in bed can do little to stop Gato and his thugs. As Gato walks up and tries to touch Zabuza's face the now unmasked boy grips his wrist and starts to crush it. The two body guards try to help but the boy swiftly stops them. They retreat and we learn from Zabuza that the boy's name is Haku.
Zabuza was hiding a kunai under the blanket and needed no help but Haku was just being protective and the fact that they are hiding out from the real ANBU. Back at the training session, Naruto does little to improve, and Sasuke slowly gets better and better. Naruto then decides to ask Sakura for a few tips but for her not to tell Sasuke. Kakashi notices the power they both have and the fact that both have great talent.