The Christmas Conflict refers to the battle between key members of the Tokyo Manji Gang and 10th Generation Black Dragon which include the First and Second Division Captains and Vice-Captains, the Presidents and Vice Presidents of Toman and Black Dragon, and the Shiba family.
After Taiju Shiba attacks Takemichi Hanagaki, Hakkai Shiba agrees to join Black Dragon to protect him. Takashi Mitsuya forges a peace agreement with Taiju: Hakkai will join Black Dragon, and Taiju will stop his abuse against Yuzuha Shiba, his younger sister. Additionally, Toman will not engage in battle with his gang. Taiju accepts his offer.
Following the agreement, Hakkai discloses his plan to kill Taiju to Takemichi and Chifuyu. Takemichi believes this will lead to a bad future; however, when consulting the other division captains, he is dissuaded from an all-out conflict with Black Dragon, as this would violate the agreement Mitsuya made with Taiju.
Kisaki and Hanma offer to help Takemichi and Chifuyu, and formulate a plan to defeat Taiju and stop Hakkai on Christmas Night. Takemichi is tasked with convincing Hakkai, while the rest will fight Taiju. Kisaki and Hanma betraying them by restraining Chifuyu and allowing Taiju to enter the chapel.