No tournament. The showdown happens at a Village Celebration when Daniel's girlfriend is taken hostage at knife point to force Daniel into a fight-to-the-death battle in which he is able to summon the lessons that he has learned while in Okinawa. Baby rattle for the win!!!!

No. He is there to lend support to Miyagi, who is there to see his dying father. That's the hook to get them over to Okinawa. The backstory involves his former best friend Sato that he "insulted" by professing his love to the women that was arranged to marry Sato. With Sato's honor insulted, Miyagi is challenged to a fight to the death. Miyagi wants nothing of this and it's very reason why he left Okinawa and ended up in America. So, with Miyagi back, Sato and his Nephew are basically out to get him and Daniel. The subplot is that he is able to rekindle his love for the woman he left behind. Like I said, it's a good story and a worthy sequel. Along the way, Daniel learns about customs and traditions...as well as a 'finishing' move, much like he did when learning the Crane Kick in the first film.

If you like the first film, you owe it to yourself to at least check this one out.