The episode introduces a series of flashbacks to 1965. It reveals:
: Kreese purges "weak" students from the dojo—including Bert, for refusing to feed a live mouse to a snake. He successfully recruits Tory back into the dojo after visiting her home and intimidating her sexually predatory landlord. Flashback: The Origin of John Kreese Watch Cobra Kai S03E02 WEBRip x264-ION10 1
: Miguel wakes up in the hospital but discovers he has no sensation below his ankles. Devastated by the news that he may never walk again, he blames Johnny’s teachings for his condition and orders him to leave. The episode introduces a series of flashbacks to 1965
Spiraling after being rejected by both Miguel and his son, Robby. Flashback: The Origin of John Kreese : Miguel
A young John Kreese worked as a polite waiter and dealt with constant bullying from local jocks.
: The two rivals team up to find Robby, who is still missing after the school fight. Their collaboration is short-lived; after tracking a lead to a chop shop and engaging in a "Buddy Cop" style brawl against goons, they end up fighting each other and parting ways due to their clashing methods.
For more details on specific scenes or character backgrounds, you can check the Karate Kid Wiki or TV Tropes' Recap .