But first:
Prepare yourself!
For I am about to reveal
SPOILERS!!!!!!!

You have been suitably warned. Now I may continue.
Splinter leaves the TMNT, without telling them what his real business is, leaving Leo in charge.
Apparently, this is nothing all that 'new' but the Turtles are old enough now to be really curious, and Raph, Mike and Don want to follow Splinter. Leo argues they are supposed to stick around. Raph presents the "logic" of Leo is supposed to keep an eye on the 3 of them, so if they leave, Leo has to follow.
So they follow Splinter, who goes to a dead-end alley, near a puddle. He pulls out a piece of chalk and marks up the wall with various symbols, including some of the I Ching, some kanji-ish stuff, etc. He begins to meditate, speaking some incantation (I never heard without sound ;p).
Suddenly the markings glow, the puddle flows up and a dimensional portal opens. Splinter goes through, and it closes.
The Turtles study the area, and of course it's just a blank wall. Don pulls out one of his gadgets, and can read the chalk line residue on the wall. They redo the marks, then Leo focuses and runs through the mantra. The portal opens again. There's some hesitation, then Raph shoves Mikey through it, and of course they all go through--
To land in another place. A few moments later, another portal opens and very interesting stick-like, birdish beings appear. They immediately challenge the TMNT and there's a battle.
The Turtles subdue the other beings, Leo's swords are broken in the process. The mysterious "referee" from the Ultimate Ninja episode appears and declares the Turtles the victors.
There's clearly confusion on their parts, and then they end up witnessing Splinter battling a giant. They want to help their sensei, but are prevented by "the Referee" from doing so, an energy bubble surrounds them.
Splinter finally defeats the giant, and then, the giant and Splinter great each other as friends!
The Turtles now learn that this is (my terms here to make it simple) a Mortal Kombat kind of event (although it seems only on a level of a warrior challenging warrior in good sportsmanship). Splinter has won it before, as did Hamato Yoshi before him, so he's something of a legend there. There's a story told of a dragon that lost to Splinter, even though Splinter's leg was broken during the fight. The dragon is mad and ambushes Splinter out of bounds later that night. This is where the Young Usagi appears. Usagi was carrying water when he comes across the fight. He helps Splinter, but it's the Daimyo's appearance that finishes it, when the two are in peril from the dragon having them both pinned.
Back to the present, there's some questioning the Turtles being there, as Splinter did not mean for them to be at the tournament. But they already won their 'qualifying match'. Splinter decides to allow them to compete. The Daimyo (also appeared in the Ultimate Ninja episode) appears with his son who apologizes to Leonardo for the duel he put Leo through on their last meeting. They offer to repair Leo's swords.
They are escorted to the arena area where they see a familiar face from their time in the Triceraton's dimension at the Arena games there.
And then the episode ends when they walk down a long hall of statues of former champions. The rest go ahead while Leo chooses to pay his respects to Yoshi's statue. But then, cloaked shadows slip out, armed with crossbows and such, and prepare to ambush Leo....
Hope this was good enough for you!