Pupils - Fight any NPC (except for the main story ones) using the reversed side of your weapon, knock down there vitality to 0 and then talk to them choosing the last option. They will either join your dojo or kick you and run away. Max is 20 pupils
Challengers - during random times, challengers will appear in your dojo. Quickly go to your dojo to fight them. Most times, before you reach the challenger will kill your pupils. Sometimes before you reach, your pupils will ward off the challenger.
*Note - The more pupils you have, the higher the rating your dojo will become (Max is 5 stars). The more challengers will come and stronger they will be.
Recommendation - Do the Sensei sub-quest to get her as your assistant, it will help you out alot
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~Thinking of a Master Plan~