This is story related.
This will unlock after conquering the 70 man battle at the end of the game. You are paired with Gui Zhang and you have to fight through loads of Man Angels members. It is best that you use a quick to execute move that you have built up a little to take them out as they are nearly all very weak.
Head through the alley on the left once you have cleared away the initial few, where you come across a large open area. Keep fighting. Every so often you see bosses enter (they have special introductions) and are harder to beat than the others. Be sure just to tackle this guys on their own, and that you dodge a lot of their powerful moves. If you become low on health, then either run around with
for a bit so that you avoid enemies, or just stand still and get the weaker ones approach you. Take your time throughout.
The last guy that enters is a boss, that friend of Terry's. He is very tough to beat, and Gui Zhang doesn't even help! Keep at a reasonable distance so you can notice his attacks early enough to dodge them with
+ direction, and so that you can attack him at legs length (with leg based moves). Take your time here, there is no rush (and so you can heal slowly too).