A young Naruto paints the villagers houses and runs away, while hearing them complain that there's no one to pay for the damages because Naruto has no parents. Later, when the Third Hokage comes to his house to give him his allowance Naruto asks him who his parents were and how were they like. The Hokage refuses to answer him, telling Naruto that it wouldn't bring back the dead. A few years later, while in the Academy, Naruto meets Sasuke Uchiha and is continuously defeated by him. During one spar, Naruto realises that Sasuke's eyes are filled with hatred. Shortly after that, he finds out that Sasuke is the only survivor of the Uchiha clan massacre. After graduating, Naruto and Sasuke are placed on the same team along with Sakura Haruno and manage to pass Kakashi's bell test. As they go to their mission to the Land of Waves, they are attacked and Naruto gets injured. To everyone's dismay, Naruto pierces his own hand to remove the venom and vows to never need to be saved again.
In this episode, Naruto didn't attack Kakashi before he could start the bell test.
The Academy scene in this episode when Sasuke defeats Naruto, was taken from chapter 538. This episode, however, does not chronicle the events of that chapter.