The episode starts off with Botan telling Yuusuke about a terribly youkai by the name of Randou. She explains that Randou goes around learning the techniques of high martial artists, and transfers it into his own style and experiments his new found techniques of unfortunate victims. Just so it happens, a very powerful martial artist Genkai, is finally accepting a student. Koenma is worried that Randou will be mixed in the group, and Genkai's famous attack is VERY powerful. Yuusuke is bribed into going, that if he wins to become Genkai's student, Reikai will give him a VIP ticket to see Yuusuke's favourite wrestling match.
Yuusuke is berrating himself as he walks up the long flight of steps towards a temple where Genkai resides. He now knows he's been tricked into coming, and really starts to wonder what on earth he's doing at this Genkai's place when we get several scenes of major weirdos. Kuwabara is amonsgt them. He explains that his psychic abilities have lately increased, and has seen too many things that he does not want to see. He also informs Yuusuke of Genkai's powerful Reidouhaidouken, which Yuusuke refers to as an attack move from Ken in Street Fighter.
Genkai finally appears, and she says since there is so many people, they'll have to draw straws to past the test. Everyone draws a small white envelop from an urn. If the paper inside is red, they can continue, if it's white, they can go home and sleep. Two great big hulks, humiliated that Genkai should use such methods of chosing a student, challenges her. She reveals that the paper inside automatically turns red if a person has potential reiki. She then insults them, calling them great big lards without and reiki, and blasts them out of her front door. Yuusuke is amazed, and is now determined to be her student.
The next test is a whacking machine, a paper rock and scissors machine and a karaoke machine, all designed to test the strength, sensitivity and amount of reiki. You must past all to move on.
Kuwabara and Yuusuke successfully make it through to the next test. Genkai has lead them to the front of a forest, which is clouded with youki and dangerous animals of all sorts. There is a lone tree in the distance, and to pass, you have to reach the tree within 2 hours. Some contestants, daunted by the intensity of the youki, run off. Yuusuke is now even more determined, and races into the forest with a shout from Genkai.
Kuwabara is the first to make it, and stands, cheering and praising himself for having beaten Yuusuke. Other successful contenders also arrive. Just as Genkai calls time, Yuusuke runs up the hill, fuming about how he wasted time fighting with a pathetic Batman. Genkai is amazed at Yuusuke's ability, and allows him to pass. 8 people are now left.
The next test is a knock out. Contestants draw straws to see who they'll have to fight. All fighting is done in the dark. Kuwabara's match is before Yuusuke, and his opponent is Musashi, who claims that his sword has been dipped in holy water and will fear no youkai. After having the upper hand on Kuwabara, he then decides to finish him off with one of his attacks of continual lashing. On thinking that he's killed Kuwabara, he realizes that his sword tip had broken off, and is extremely amazed, and more shocked to find that Kuwabara still can stand. Kuwabara's life is now at stake as Musashi prepares for another attack. Musashi disappears, but just as he's about to bring his sword down on Kuwabara, a sword made of reiki appears from the tip of the sword Kuwabara had been holding onto. Genkai explains that Kuwabara has an inner reiki that hides inside him and unleashes out into a form of a sword when Kuwabara is in mortal danger. Kuwabara finishes Musashi off with one stroke. Genkai claims Kuwabara victorious.
Yuusuke now is pitted against Sabano, who cheats by wearing this mask which covers all of his five sense, allowing him to be able to feel his opponents ki more accutely. He is able to trash Yuusuke for a while, and Genkai tells him to get up. However, Yuusuke contines to fight and recieves to almost life deeming attacks from Sabano. He rebuts saying that he can couterattack any time. Sabano laughs, and rushes towards him with his attack again. However, Yuusuke is somehow able to locate Sabano's position in the darkness and fires his reigun at his head. Sabano realizes that Yuusuke had put a lit cigarette (thrown but missed at Yuusuke by Genkai when he was mucking around) in his belt. Ashamed, Sabano then dies.
Genkai now the last four outside. She takes them to a very spiritual field up in the mountains where the souls of thousands of soldiers lie. Yuusuke has to fight again, Kazemaru (ninja) his opponent this time, also cappable of firing a ki blast from his palm.
Kazemaru take the upper hand for most of the match, with his flying things going non stop after Yuusuke. Yuusuke, realizing that this guy could be Rando, doesn't give up and plans to run straight towards him to die together. Kazemaru sees this, but calls Yuusuke naive as he prepares a reiki blast himself. However, he is thrown off concentration when Yuusuke suddenly disappears. He mucks up his blast and is killed by his own weapons. Kuwabara and Botan find that Yuusuke had fallen into a mud pit by accident, but now continues to the finals. Shourin is now left, and they analyze that this had to be Rando. Yuusuke begs Kuwabara to give up, but the latter doesn't and proceeds to gain an easy upper hand in the match. However, Shourin lets out a spell which turns Kuwabara into a tiny midget, and decides to destroy him. After breaking his arm, he tosses the little midget away, and reverses his spell, revealing the location of a heavily injured, perhaps dying Kuwabara. Yuusuke in anger is able to kill Shourin, only to discover to true form of Rando.
Unfortunately, I did not get the pleasure of seeing how Yuusuke killed Rando in the end (of course Yuusuke won), but it seems that Yuusuke himself nearly died, but continued to fight back. Just as Rando uses the spell on Yuusuke that he had used on Kuwabara, something goes wrong. He realizes that Yuusuke didn't shrink, but he did. Yuusuke, all bloody and injured, is so infuriated with anger about all the past actions of Rando, makes use of gravity and plunges his elbow down onto the now shrimped Rando, killing him. Yuusuke is the winner.