The Flaming Wheels

It is revealed that Sagisaka believes in youkai because his daughter, sole survivor of a brutal demon attack at her school, is one of the few who lived to tell about the demons. But she is hospitalized for mental/emotional problems caused by the demon attack, and her father is still waiting to get her testimony of the events. Kure and Sagisaka pursue Nue and run into the Mikura Wanyudo, which attacks them. Nue attacks Wanyuda, but is unable to kill him, and is injured before Otoha appears in Karas form and kills the Mikura off, with Nue forced to reveal his true Mikura form.

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S01E03 - The Destruction Awakes