The plot of the movie takes place several years after Afro defeats Justice and becomes the owner of the number one headband. However, due to the overwhelming burden of death the headband brings, Afro decides to abandon the lifestyle he has and instead spends his time chopping wood figures.
Unbeknownst to Afro he is in great danger now that an old enemy appears to seek revenge. Sio, a mysterious woman who apparently suffered because of the actions of Afro, seeks to torture Afro in an attempt to restore justice. Afro meets Jinno, who is now working for Sio, early in the film. Jinno attacks Afro unexpectedly, resulting in Afro being instantly defeated. Jinno takes Afro's unconscious body to Sio. Sio then takes the number one headband from Afro. She finds the grave of Afro's father, Rokutaro, and takes his jaw, hoping to genetically clone him and make him kill Afro.
After his defeat, Afro begins to seek out Sio. Due to samurai code, Afro knows that he may not immediately challenge Sio for the number one headband. Only the owner of the number two headband may challenge the owner of the number one. Thus, Afro begins seeking out the owner of the number two headband with the help of Ninja Ninja.
To track down the location of the current number two, Afro and Ninja Ninja decide to find the third brother of the empty seven clan, who also happens to be the only surviving member. Brother three offers Afro a deal: If Afro can beat him in a game of dice, then he will tell Afro the location of the number two headband. If Afro loses, however, then Afro must be killed. Afro agrees to play. Brother three wins the game of dice easily. Afro quickly discovers that Brother Three was cheating and threatens to kill him. Out of fear, Brother three then tells Afro the location of the number two headband. He tells Afro that a man known as Shichigoro is in the possession of the headband, and is possibly in a nearby town where a festival is being carried out.
On the way to the town Afro and Ninja Ninja witnesses a man kidnapping a small child. The father of the child chases the criminal, but cannot catch up. The kidnapper recognizes Afro while running away and freezes in place, staring at Afro. He then tries to shoot Afro out of fear. Afro, presumably to protect his anonymity, cuts down the kidnapper instantly. The father of the child, who happens to be Shichigoro, is very grateful towards Afro and offers him a drink in the nearby town that Afro was headed towards. Afro accepts the offer.
While having their drink, Shichigoro tells Afro the story of him and the small child (named Kotaro), his adopted son. Shichigoro tells Afro that Kotaro was his best friends son. His best friend was murdered while attempting to obtain the second headband, by someone with "an afro with a slightly green tinge, if you looked close enough." He is presumably saying that Afro murdered his best friend. Shichigoro promised to protect his best friends son and adopted him. Shichigoro also obtained the number two headband, and vowed to hide it, because of the destruction and pain that it causes. He then invites Afro outside to fight him, because he knows that Afro is there to kill him. Shichigoro and Afro leave the restaurant owner, along with Kotaro, and head outside the city to fight.
At first, the fight is very difficult for Afro, who is overwhelmed by the speed and technique of Shichigoro. Afro does well defending himself until Shichigoro uses a hidden chain to attack him. The chain is very lengthy and can change direction easily, making it difficult for Afro to predict its movements. Because of this, Afro leads Shichigoro into the city where the festival is happening. Fighting in a more enclosed area hinders Shigigoros ability to use the chain. Unbeknownst to Afro, his fight is being watched by Sio. Sio sends several men to kill Afro and Shichigoro. These men cause great chaos with their flashy entrances and smoke bombs, which causes mass hysteria from the festival goers. Kotaro, who was sleeping in the restaurant, wakes up and goes to look for his father as a result.After defeating Sio's men, Afro and Shichigoro continue their fight. Afro capitalizes on Shichigoro's neglect and manages to attack and kill him before the eyes of Kotaro. Devastated, Kotaro mourns over the body of the man he came to consider a father. Afro then leaves the small town.
Soon after leaving the small town, Afro has a brief confrontation with Sio and Jinno. Sio shows Afro a cloned, twitching head of Rokutaro. Afro, out of disbelief and disgust, attacks Sio but is stopped by Jinno. Sio informs Afro that she will be waiting for him at an old location that Afro and Jinno would meet as kids. She then quickly escapes along with Kuma, and Afro begins walking to the location.
Afro is followed for several days by Kotaro, who seeks to avenge the death of his father as Afro did several years ago. However, after many days without food or water, Kotaro loses consciousness. He wakes up after an unknown amount of time under a shady rock with water placed next to him. It is not known who saves him. Kotaro is also seen to have his fathers sword, which he presumably picked up after Afro left the small town. Soon after, Dharman sends the adopted siblings of Sio, who he reconstructed as cyborgs, to kill Afro. They find Afro and ambush him. Although they are enhanced with weapons and manage to injure Afro, they cannot kill him, and Afro defeats them one by one.
Sio, after finding out the Dharman had sent out the cyborgs to kill Afro without her permission, stabs Dharman in the neck. She releases the unfinished clone of Rokutaro due to impatience and heads towards the location that she told Afro to meet her.
Afro arrives at the location with Ninja Ninja (who has been accompanying him the entire film) and meets Sio, Jinno, and his cloned father. Afro sees his cloned father and is convinced that it is his real father, which causes Ninja Ninja to give up on Afro and leave. Jinno attacks Afro who cannot evade due to his injuries while fighting the cyborgs. Afro goes unconscious after being hit by Jinno and has hallucinations of his father. His father tells him that he is disappointed in him for not carrying the burden of the number one headband.
Afro regains consciousness soon after, and awakes to find his fathers clone in front of him. The clone proceeds to viciously beat Afro while Sio and Jinno watch. Afro refuses to fight back because he still believes that the clone is his father. He is then choked to unconsciousness by the Rokutaro clone. As Jinno looks on, he begins to have flashbacks of the good times he shared with Afro when they were younger. He cannot stand to watch Afro being killed and thus attacks the Rokutaro clone out of rage. The clone is too strong however, and quickly dispatches of Jinno. Sio attacks the clone in an attempt to defend her brother but is quickly killed as well. Rokutaro takes the number one headband from Sio and wears it. Meanwhile, the pool of blood from Jinnos body mixes with his cyborg wires, causing a spark, which shocks Afro into consciousness. Afro puts on his number two headband, and challenges the Rokutaro clone, stating "You are not my father. My father died long ago." They fight, but this scene is not shown in the film.
The next scene shows Afro walking away from the place he met Sio. He is wearing the number one headband, so it can be assumed that he killed the Rokutaro clone. He runs into Kotaro, who had still been following him. He gives Kotaro the number two headband and tells him "Whenever you're ready", implying that he is willing to fight Kotaro when Kotaro is able to challenge him. Afro walks into the distance and the film ends.