Mizuki was taken to the Anbu. After an interrogation, he was thrown straight into Konoha Prison for rehabilitation.
As for Naruto, having defeated Chunin Mizuki all by himself, it clearly made no sense to send him back to the Academy for further "study." Once Hatake Sakumo stepped in, Hiruzen Sarutobi naturally went along with it.
Though Iruka had some reservations and felt that pulling strings was wrong, he could not fight the powers that be. He had no choice but to issue Naruto a Ninja Headband.
Meanwhile, Kakashi finally returned from the Land of the Moon.
"Hokage-sama." Kakashi arrived on the rooftop of the Hokage Building and dropped to one knee behind Hiruzen Sarutobi.
"You're back." Hiruzen Sarutobi took a drag from his pipe and asked, "Did you find him?"
Kakashi shook his head. "No. There wasn't the slightest trace of him."
Hiruzen Sarutobi was not surprised. Houka was an existence stronger than a Kage, and he was familiar with Kakashi's way of doing things. How could Kakashi possibly find him?
"Put that matter aside for now." Hiruzen Sarutobi turned around and smiled. "You should know why I called you back this time."
Kakashi began playing dumb, his eyes filled with confusion and innocence. "Please enlighten me, Hokage-sama."
Hiruzen Sarutobi did not know whether to laugh or cry. "Naruto has already graduated."
"Ah." Kakashi continued looking innocently at Hiruzen Sarutobi.
"That's enough, know when to stop!" Hiruzen Sarutobi snapped in embarrassment. "Now that you've completely left the Anbu, obediently take on a class of students!"
"Being a Jonin instructor is such a headache." Kakashi scratched his head in distress, then said seriously, "But Hokage-sama, let me make this clear first: if Naruto doesn't pass my test, I won't lower my standards just to instruct him!"
If he could not understand