Jiraiya and Naruto leave Sasuke with Gai and then head off to find Tsunade. Before they leave, Gai gives Naruto a green training suit like Lee's. Naruto is thrilled with his new attire, but Jiraiya won't be caught dead with someone wearing that nasty green leotard.
As Naruto and Jiraiya continue on their quest, Itachi's words haunt Naruto. He asks Jiraiya why the Atasuki might want him. Jiraiya explains they're after the Nine Tails, a mystic beast that destroys everything in its path. He doesn't know what they'd do with Kyubi, but as long as the fox is sealed inside Naruto, they'll come after him.
Meanwhile, Tsunade heads to the gambling center with the highest wage and asks to join the game.
Naruto asks Jiraiya about Tsunade. He explains she's one of the legendary Sennin who loves to gamble at it but has horrible luck. She's known as the legendary sucker. She also doesn't like aging, so she's probably changed her appearance.
Soon, Naruto is ready to train as they continue and pulls out the suit Gai gave him. Jaraiya tries desperately to convince him not to wear the hideous green suit. Luckily, they arrive in a festive town and Naruto is distracted. He pulls out his frog wallet brimming full of his life savings and anticipates the fun he'll have. Jiraiya chides him for thinking of spending his money here and warns him of the three taboos for a ninja - alcohol, women, and money. He then hands Naruto a few bills to spend and keeps the wallet.
Naruto parts from Jiraiya's company and wanders around the festival. He tries a number of dishes and plays a few games. He then buys some squid and heads back in search of the Sennin. Much to Naruto's dismay, he finds Jiraiya in the company of several girls and his empty wallet. As Naruto reprimands Jiraiya, two men appear behind them, and in Naruto's haste, he actually throws his squid at one of the men, leaving a stain on the man's shirt. The man reveals that he's the killer ninja, Yaminin, of Hidden Village of the Rock, and demands payment. Jiraiya's not impressed and easily defeats the two.
He then decides to teach Naruto the new technique he just performed on Yaminin and his friend. He gives Naruto a bunch of water balloons and demonstrates how to rotate the water inside the balloon without moving his hand. Naruto should accumulate and maintain chakra in his hand like the tree climbing exercise. He should then release a constant amount of chakra like the water walk exercise. And finally, he is to push and rotate the water inside the balloon. If he can create a sharp enough rotation, the balloon will burst.