A local Jiu-Jitsu academy owner, Mike Terry, (Chiwetel Ejiofor) is hired by a big time actor, Chet Frank, (Tim Allen) to be his personal consultant and assistant producer of a Gulf War movie after Terry defends Frank in a bar fight.
Terry fought in the Persian Gulf and pioneered some very productive self-defense maneuvers which the studio wants to incorporate into the movie.
Frank and his people steal Terry's ideas without paying him, and never contact him again.
Terry then sees that the studio sold his ideas to the Mixed Martial Arts corporation and attempts to sue with his lawyer friend Laura Black (Emily Mortimer). Unfortunately, Black is a prescription pill drug addict and was involved in a shooting at Terry's studio. Despite the fact that no one was hurt, she used an LAPD officer's gun to shoot through a window in an act of insanity from drug withdrawal. The officer never reported it. Since the Mixed Martial Arts corporation has this information to use against Terry's friend's, he drops the suit. The LAPD officer shoots himself out of shame for disgracing Terry's academy.
Terry is desperate for money and agrees to fight in a $50,000 competition's, despite the fact that he does not believe in fighting for money. Terry discoverers that the whole fight is fixed to have him win so that he will take the money and never sue the corporation again for stealing his ideas. He fights the champion fighter and head of the corporation, Augusto Silva, in the wings of the arena and wins.
He is given the sole red belt by the ultimate Jiu-Jitsu fighter.