Ryu battling the Dark Hadou decides not to fight, Shun is disappointed he wants to see Ryu fight. Instead Shun enrols in the competition. Meanwhile Ken has lost is way and is too late to enrol, he joins Ryu as a spectator.
First up is Vega, his opponent is Dan. The fight is quick and Vega wins. The second round is Zangief versus Shun. Shun begins with some quick attacks disorientating Zangief and landing many shots. It is not enough though as Zangief grabs Shun by the leg and slams him to the ground using his signature spinning pile driver move. Shun is barely conscious and Zangief kicks him aside, thinking he has won.
However Shun starts building up his power, Ryu recognises this power as the Dark Hadou. Shun is unable to manifest the power and continues to get beaten by Zangief. The Dark Hadou increases drawing Ryu in. Ryu forms the Hadou and aims it at Zangief, only a scream from Ken brings Ryu to his senses and the Dark Hadouken misses Zangief blowing the top of the building clean off.
In the debry Shun is alive, but before anything can be done he is taken away by helicopter...a helicopter with Shadowlaw markings. With the help of Chun-li Ryu and Ken enter the final tournament on the island of Dr. Sadler, where along with other top martial artists, they must fight each other and get to the Shun before the Dark Hadou seizes control of Ryu.