Jiyu Nanohana is an ordinary schoolgirl until she runs across a scatterbrained 300-year-old samurai who tells her that she is the reincarnation of Yagyu Jubei. With the help of the "Lovely Eyepatch", she transforms into the legendary swordsman whenever she needs to use his awesome fighting ability, which she needs to do quite often as a rival clan is a dead set on conquering Yagyu to satisfy an old family grudge.
Jiyu Nanohana, a fourteen-year-old junior high school student who attends Hontsuru Jr. High unexpectedly meets Koinosuke Odago, an assistant of Yagyu Jubei who has searched 300 years for a worthy successor for the Lovely Eyepatch. He implores Jiyu to accept.
Bantaro was cured by Shiro's mother. As things begin back to normal, Hajime appears and asks Shiro to join their clan; Shiro explains that he has no intentions of doing so, but Hajime reminds him that he knows Shiro has a longing to fight Jubei II and lea.
Mikage and her husband are requested to defeat Jubei II, they kidnap both Sai and Koinosuke in order to force Jiyu to give up the Eyepatch in exchange for the hostages. When Mikage puts on the Eyepatch, though, it starts burning her.
In order to release Jiyu from the burden of becoming Yagyu Jubei and being targeted by the Ryujoji, Shiro challenges her to a duel. Later, Jiyu meets a Ryujoji assassin, he explains their 300-year-old grudge and goal to her.
Jubei II defeats the assassins. Afterward, Shiro and Jubei II engage in a duel, he cuts off the Eyepatch, but as soon as Jiyu returns to her normal self, she collapses. Bantaro takes her to a doctor while Hajime attacks Shiro, and takes the Eyepatch.
Back to Hajime's hideout, he has not discovered the power of the Eyepatch, thus, he orders his men to go get Jiyu. Meanwhile, the Nanohanas is having a party, Mikage appears during the show and tells Jiyu about their changed lives.
Jiyu along with Koinosuke and the Ruffians are being held hostages, Hajime tortures her friends, forcing her to tell him the power of the Eyepatch. Shiro appears and fights him, Hajime is defeated by Jubei II. When Shiro goes back and thanks to the old teach.
Mikage while exploring the Ryujoji's hideout, was attacked by Shiro/Taiko Daiyu and was heavily injured. Sai finds her as Mikage stumbles out and collapses in front of him. He brings her home, treats her and then hugs her, but Jiyu sees everything and run.
While Jubei II fights Shiro/Taiko Daiyu, Koinosuke explains everything to the rest. Jubei II is exhausted and nearly killed by Taiko Daiyu, but Shiro takes over his body and holds back the thrust. Jubei defeats him and Taiko Daiyu's spirit leaves the body.