After escaping from the Magaki group, Utakata and Hotaru are found by the Hunter-nin who are after Utakata who ran from the village and killed his master. Team 7 arrives to save them and discovering that they're arrive Utakata, Yamato tries to negotiate with them. Tsurugi reveals himself and decides to have a talk with Yamato and Utakata alone. Tsurugi says to Yamato his unit will free Hotaru and will hold off their capture of Utakata until Team 7's mission is complete. After that he talks to Utakata alone where he tries to convince him to return to the village. With what his former master did to him, Utakata refuses and Tsurugi tells him his master only tried to free him from that "thing" though Utakata still refuses to believe it. Once their talk was over, Tsurugi and his unit leave and say they will be watching them.
When Utakata ponders on if Tsurugi was telling the truth, he goes out to search for him. Tsurugi, noticing Utakata is looking for him, goes to see him but him and his unit run into the Animal Path of Pain's Giant Multi-Headed Dog summoning and are killed.
Trivia
Both Tsurugi and Kakashi Hatake have a scar running through their left eye.