After Arnold is mugged on the street, Grandma teaches him martial arts, but Arnold doesn't use it as self-defense until he and Grandma bump into his mugger again.
One night, Arnold rides the bus home listening to his walkman. When he gets off the bus, a teenage thug grabs him and shoves him into an alleyway. The thug takes Arnold's money (65 cents) and his bus pass, throws him at the trash cans for not having more and leaves. Arnold, bruised and battered, makes his way home and tells Grandpa and Mr. Hyunh what happened. Phil suggests Arnold take self-defense classes. Grandma comes in with dinner and hears what happened to Arnold. After examining him for a black eye and missing teeth, she assures Arnold that he's fine and offers to make him green tea. Arnold says he'll make hot chocolate instead and leaves. Grandpa asks what they should do about the incident, but Grandma says that she has plans for Arnold.
The next morning, Arnold comes downstairs where Grandma, wearing a martial arts gi, tells Arnold his self-defense training will begin. She takes him to a room with rocks and sand patterns on the floor and they start by meditating. A fly buzzes around Arnold's head and he tries to swat it away while Grandma catches the fly easily with one hand. She tells Arnold to be like a frog in the pond because "he does not seek the fly, the fly comes to him." Arnold tries to take the fly from her hand, but fails. Grandma says once he is able to snatch the fly, his training will be over. Grandma then takes Arnold to the roof and shows him some martial arts moves while balancing on the chimney. Arnold tries to copy the moves and ends up falling in. Next, Grandma shows Arnold how to break a board. When Arnold tries to do it, the board flies up and hits Grandpa in the face. Lastly, Grandma jump-kicks a can off of Grandpa's head. Arnold tries to do it, but doesn't jump high enough and accidentally kicks Grandpa below the belt. All the while, Arnold tries to snatch the fly and fails. Finally, Arnold successfully snatches the fly, albeit squishing it in the process. He performs what he learned for his friends and the boarding house members by breaking a board and cinder block, and kicking a can off of Harold's head.
Later on, Arnold, wearing a martial arts gi and headband, walks downtown with Gerald, enjoying how powerful he feels. They see Eugene and Brainy being mugged by three teenagers. Arnold saves them by scaring the teenagers with his moves and breaking their toothpicks in half. Gerald jokes that Arnold's hands and feet are lethal weapons, but Arnold takes him seriously and says he'll find the guy who mugged him and beat him up. Gerald tries to talk him out of it, but Arnold doesn't listen. Later, Arnold practices looking tough and saying "You talkin' to me?" in the mirror while Gerald watches from the window concerned. At school, Arnold continues his tough behavior by pushing Eugene into his locker and threatening Billy with his moves. Everyone is now scared of him.
That night, Gerald tells Arnold he's changed and that he's worried about him. Arnold tells him he hasn't changed and heads for home. A fat young man approaches Arnold and Arnold impulsively attacks him with his hands and feet, shredding the man's clothes. The man starts to cry and says he was just going to ask him where the bus stop is before sadly walking away. People on the street who were watching get angry and yell at him for attacking the man. Arnold gets scared and runs away, realizing he's let his new power go to his head. He gets on a bus and sees Grandma sitting in the back. Arnold tells her he wants to stop his new martial arts lifestyle since he was just showing off. Grandma tells him his training is now officially over and reminds him to be the frog in the pond. Arnold realizes that he shouldn't go looking for trouble, he should only use self-defense if trouble comes to him. Just then, the thug who mugged Arnold gets on the bus. He makes fun of Grandma and demands her purse. She calmly ignores his mockery and hands him the purse without a struggle. The thug recognizes Arnold and waves his bus pass in his face, taunting him to grab it. Arnold pictures him as the fly from Grandma's hand and quickly snatches the bus pass. The thug freaks out and gives back Arnold's money and the purse before fleeing the bus in terror. Grandma congratulates him and promises to make him green tea when they get home, but Arnold turns it down again for hot chocolate.