This begins with the duel between Hiei and Shigure (the one who gave Hiei his Jagan). Hiei has a flashback to his early. In the Ice World, he was thrown off a cliff because he was "the Forbidden Child". He was found by a demon clan. They were fascinated by Hiei teargem from the Ice World. He made a name for himself as a ruthless killer.
Eventually, Hiei left the clan of demons. He went to Shigure for the Jagan eye. He wanted the eye to find the Ice World and the teargem, which was cut off of his neck during a fight. Shigure refused to give Hiei the eye because he did not think Hiei could endure the pain. Hiei proves he is worthy by sticking his katana through his own hand.
After the operation, Shigure asked Hiei to stay because the operation drained all of his spirit energy. Hiei agrees, figuring he will never see the surgeon again.
The duel begins. Shigure throws his circle sword/boomerang at Hiei. Hiei blocks the sword, losing his left arm in the process. Shigure recovers and cuts Hiei.