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to South Town to participate in the "King of Fighters" fighting tournament being held by Geese. After winning the tournament, Terry and Geese have a showdown at the top of Geese Tower, and Geese is sent falling from the building, believed to be dead. One year later in Fatal Fury 2, Geese's half brother Wolfgang Krauser hosts a new global King of Fighters tournament in a bid to draw out Geese's killers and prove himself stronger. At the end of the tournament, Terry defeats Krauser, who is believed to have taken his own life in shame.

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