Twelve years ago a demon nine tailed fox appeared and terrorized the people of the leaf village. The leaf village ninja fought it until their leader, the 4th hokage, appeared on a giant toad. The 4th hokage sacrificed his life to seal the nine tailed fox inside of a young boy.

A young boy named Naruto is being chased by two ninja in his village for painting on some giant stone faces of the Hokages.

Some ninja tell the third hokage that Naruto has put graffiti all over the hokage.

Naruto manages to lose the ninja chasing him by blending in with his a fence but his sensei, Iruka, appears and sees through his disguise. Iruka asks Naruto what he is doing because he is supposed to be in class. Iruka ties Naruto up and carries him back to the academy.

In front of the class, Iruka chews out Naruto and tells him that he has failed the graduation test twice and that he is going to fail the next one if he doesn’t pass the next one. Naruto just ignores him so Iruka says the entire class will have to review the transformation jutsu because of him. A girl and boy named Sakura and Sasuke perfectly perform the jutsu. Naruto is called up next and is told by a boy and girl named Shikamaru and Ino that they always have to pay for his screw ups. Down the line of students, a girl named Hinata watches Naruto because she has a crush on him. Instead of performing a normal transformation jutsu, Naruto performs a jutsu he created called the sexy jutsu. The sexy jutsu allows him to turn into a naked female version of himself. Iruka gets a nosebleed and then yells at Naruto.

Later that day Naruto is cleaning the graffiti off of the hokage faces. Iruka is supervising him and tells him he can’t go home until he finishes. Naruto says he doesn’t care because no one at home is waiting for him. Iruka asks Naruto if he would like to go out for some ramen after he finishes and Naruto says he would love to and that is the kind of motivation he needs.

That night Iruka and Naruto go out for some ramen. During the meal, Iruka asks Naruto why he would deface the Hokage stone faces like that and then asks if he knows who the hokage are. Naruto says he does and goes on to explain the hokage were the best shinobi around, especially the 4th hokage who saved the village. Iruka asks why he would do such a thing then and Naruto tells Iruka that someday he will be a greater hokage than any of them because then people will start respecting him. Naruto asks Iruka if he can try on his ninja headband and Iruka tells him no because only those who graduate the academy can wear them.

The next day at the academy Iruka tells his students that the final part of the graduation exam will be a test over the clone jutsu. Naruto freaks out because that is his worst jutsu.

In the testing room, Naruto attempts a clone jutsu in front of Iruka and a chunin (second rank of ninja) named Mizuki. His clone appears on the floor as a sickly version of himself. Iruka tells Naruto that he fails. Mizuki tells Iruka that Naruto did manage to make a clone and they could cut Naruto a break since this is his third attempt. Iruka says the other students were able to create three perfect clones of their selves so it wouldn’t be right to pass Naruto.

Outside the academy, all the students celebrate that they have now become genin (lowest rank of ninja). Naruto looks on from the distance under a tree. Two women look at Naruto and discuss Naruto failing. They say it serves him right because…and then they stop and say they’re not allowed to talk about it. (He is the boy that the 4th hokage sealed the demon fox inside of. The 4th hokage wished for the village to treat Naruto like a hero but everyone instead looks at Naruto as if he is the demon fox. The third hokage, who came out of retirement after the 4th died, ordered everyone not to talk about the incident in hopes that their children would never treat Naruto poorly. However, the children saw how their parents treated Naruto and treat him the same way.) Mizuki appears next to Naruto. From a distance, the third hokage tells Iruka there is something they need to talk about.

That evening, Mizuki tells Naruto that Iruka is tough but he isn’t against him. Naruto asks why then would he fail him. Mizuki explains that Iruka wants Naruto to be strong. Mizuki then says Iruka is like Naruto, someone with no parents or family. Naruto says he really wanted to pass this time. Mizuki says he will have to tell Naruto a secret then.

That night Iruka thinks about what the third hokage told him. We hear the hokage telling Iruka he knows that he grew up without his family because they were killed by the nine tailed fox. Iruka’s thoughts are interrupted by Mizuki telling him he needs to come to the hokage right away because Naruto stole a sacred scroll called the scroll of sealing.

In the forest, Naruto is reading the scroll and sees the first jutsu is multi-shadow clone jutsu.

All of the village’s ninja are talking to the hokage about what could happen if the scroll is taken by an enemy. The hokage orders the ninja to find Naruto and the scroll.

Mizuki thinks to himself that since he has told everyone what Naruto has done he can kill Naruto and take the scroll for himself.

Iruka comes upon a worn out Naruto and tells him it is all over. Naruto laughs and tells Iruka he only had time to learn one technique. Iruka sees that Naruto has been practicing. Naruto tells Iruka everything will be ok because he will show him an amazing jutsu so he can graduate. He then asks Iruka if that is how it works, anyone who learns a jutsu from this scroll passes. Iruka asks Naruto where he got that idea. Naruto says Mizuki told him about it. Naruto and Iruka are suddenly attacked by Mizuki. Iruka pushes Naruto out of the way and is injured. Iruka tells Naruto not to let Mizuki get the scroll because he is using him to gain power. Mizuki tells Naruto Iruka is trying to scare him because he doesn’t want him to have the scroll. Iruka tells Naruto not to listen to Mizuki. Mizuki says he will tell Naruto who has really been lying. Iruka yells at Mizuki not to say but Mizuki tells Naruto that they have been lying to him since the decree twelve years ago. Naruto asks what the decree is and Iruka yells for Mizuki not to say. Mizuki tells Naruto that the decree is no one can tell him that the nine tailed fox is inside of him. Mizuki explains the nine tailed fox that destroyed their village and killed Iruka’s parents is inside of him. Iruka continues to yell for Mizuki to stop but Mizuki points out to Naruto that the reasons everyone treats him like dirt is because the fox is inside of him. Naruto begins glowing. Iruka thinks back to the hokage’s words. We hear the hokage saying Naruto gets in trouble because he wants people to notice him since he doesn’t have a family. Mizuki attacks Naruto but Iruka takes the blow for him. Naruto asks Iruka why he did that for him and Iruka says they’re the same. Iruka says that when he lost his parents no one cared about him. His grades began falling and to get attention he would clown around like Naruto does. Iruka begins crying and tells Naruto he knows it hurts inside and that he feels lonely. Iruka tells Naruto that he let him down because he should’ve been there for him. Mizuki laughs and tells Naruto that Iruka hates him because the nine tailed fox killed his parents and is inside of him (Naruto). Naruto runs off. Mizuki tells Iruka that Naruto will use the scroll to take his revenge on the village. Iruka attacks Mizuki and tells him that Naruto isn’t like that. Mizuki leaves telling Iruka that he’ll come back to kill him once he has the scroll.

The third hokage watches everything from his orb. The hokage says that since Mizuki has made Naruto feel so bad the seal keeping the nine tailed fox inside of Naruto could break and release the fox.

Iruka catches up to Naruto and tells him that everything Mizuki said was a lie and that he should give him the scroll because Mizuki catches up. Naruto knocks Iruka to the ground. Iruka asks Naruto how he knew it was him. Iruka then turns into Mizuki. Naruto says because he is Iruka and then he turns into Iruka. A few feet away, the real Naruto listens in. Mizuki asks Iruka how he can protect Naruto. Iruka says he won’t let Naruto have the scroll. Mizuki says Naruto is just like him and wants the scroll for his own power and will destroy everyone because he is a “beast”. Iruka says he might. Naruto says to himself that Iruka never believed in him and thinks he is some sort of beast or a freak. Naruto then hears Iruka say that is how beasts are but Naruto isn’t like that. Iruka says Naruto does mess up sometimes but he works hard and is nothing like the nine tailed fox. Naruto starts crying. Mizuki attacks Iruka but Naruto knocks him away. Naruto tells Mizuki he will kill him if he will ever lay a hand on Iruka. Mizuki tells him to show him what he can do. Naruto uses a jutsu called the shadow clone jutsu. Iruka is shocked to see that Naruto has mastered an extremely advanced jutsu (hundreds of Naruto clones appeared). Naruto and his clones beat up Mizuki. Naruto asks Iruka if he is ok and Iruka says he is. Iruka thinks to himself that Naruto may just some day surpass the hokages.  Iruka then tells Naruto he wants to give him something.

In the village all the ninja are discussing how they can’t find Naruto. The hokage appears and tells them there is no need to worry because Naruto will return soon.

It is now morning and Iruka has given Naruto his ninja headband. Iruka tells Naruto that he graduates and to celebrate they will go out for ramen. Naruto hugs Iruka.