InuYasha the Movie 2: The Castle Beyond the Looking Glass

InuYasha the Movie: The Castle Beyond the Looking Glass (映画犬夜叉　鏡の中の夢幻城, Eiga Inuyasha: Kagami no Naka no Mugenjō?) is the second movie of the InuYasha series.

It was released in Japan on December 21, 2002 (between episodes 95 & 96), and in the United States on December 28, 2004. In this film, the character designs are virtually identical to the Rumiko Takahashi versions, from the original manga (rather than using the Yoshihito Hishinuma designs, from the TV anime).

Story
The story begins after the defeat of Naraku by InuYasha, Kagome Higurashi, and their friends. There is some initial doubt as to whether Naraku is truly dead until it is revealed that the cursed void in Miroku's right hand is gone and Kagura's heart is in her body again. Kagome, Sango, and Shippo relax in a hot spring. Akitoki Hojo shows up, who is quite confused as to how he can get to Mt. Fuji. He notices the three bathing, but is caught by Miroku. Sango then notices Miroku and manages to throw a huge boulder on him. Inuyasha hears the noise and comes running, Tetsusaiga drawn. However, Kagome, who is really afraid that InuYasha will see her naked once again, orders him to sit, who promptly falls on the three. As Akitoki crawls away, contemplating his luck, InuYasha and Kagome are once again in a fierce debate. The group disbands with InuYasha, Kagome and Shippo off to pursue the remaining shards of the Shikon no Tama.

Miroku returned to his master, and Sango returned to her village to search for Kohaku.

Kagome briefly returns to her time period to catch up in school and happens to be learning about the legend of Princess Kaguya. Kaguya was a maiden from the moon, found by a bamboo cutter in the forest. As suitors proposed to her, Kaguya presented to them impossible tasks before returning to the moon.

Kagura and Kanna, the two surviving incarnations of Naraku, are somewhat restless now that Naraku is dead. They come across a mirror in a hidden shrine and awaken a maiden who declares herself Kaguya, Princess of the Heavens. In exchange for freeing her, Kaguya promises to give Kagura her true heart's desire, freedom. Kagura and Kanna set out to recover five items that will free Kaguya from her mirror completely.

Kohaku has returned to Sango's village without any memory as to who he is. Miroku's master, Mushin, presents him with a task that is to be given to the surviving descendant who defeats Naraku. Miroku is to destroy a yōkai who threatens to cast the world into eternal night, at which the first sign of the yōkai's appearance for the first time in 50 years is a full moon shining for many nights.

Kagome returns to InuYasha's time and the two of them, along with Shippō, go to find the remaining shards of the jewel. InuYasha detects Naraku's presence and runs into Kagura instead.Kagura easily rips the sleeve off of InuYasha's kimono. She and Kanna are about to take their leave when the moon appears and a poem is said. Kaguya makes her appearance and uses her ability to discern the dark desires of InuYasha's heart against him. Kagura unleashes her most powerful attack, Dance of the Dragon and InuYasha sends it back to her using his Backlash Wave but is stopped by Kanna who uses her mirror to send the attack back at InuYasha. Kagome manages to stop Kaguya from inflicting major damage to InuYasha and the demons leave, with Kaguya noting Kagome has a strange aura about her that does not agree with the flow of time.

InuYasha and company leave to pursue Kaguya and run into Akitoki Hōjō, the ancestor of Kagome's classmate, who is supposed to dispose a family heirloom (a hagoromo/celestial robe) into Mount Fuji. He joins them, partly because he has a bit of a crush on Kagome and partly because he is being blackmailed by Shippo for an earlier incident. Meanwhile, Kikyo investigates Naraku's death and has come across a slaughtered village where a dying girl gives her the Stone Bowl of Buddha.

Miroku (with his tanuki servant, Hachiemon) journeys to his grandfather's (given the name Miatsu) grave to find the yōkai he is supposed to destroy. He hears the local legend of the celestial maiden, Kaguya. Miroku's grandfather, who one of the most powerful priests in the series, which is evidenced by the fact that he was able to defeat Kaguya alone, sealed her away into a mirror and was unable to kill her due to her beauty and his own lecherous ways. Kaguya's hagoromo was entrusted to a family that was also given specific instructions for disposing of the robe should Kaguya be freed. Kagura arrives in Sango's village and attacks Kohaku, taking off with the Swallow's Cowrie Shell that was in Kohaku's possession. After Kikyo surrenders the Stone Bowl of Buddha without a fight to Kagura, she and Kanna free Kaguya from her mirror. Kaguya goes to find her hagoromo and runs into InuYasha and Kagome. After pinning InuYasha to a tree, Kagome fires an arrow to kill Kaguya, but she absorbs it and fires it at InuYasha. Kagome then jumps in front of the arrow and Akitoki throws the hagoromo/celestial robe in between the arrow and Kagome but Kagome gets hit by her own arrow in order to save InuYasha. InuYasha thinks Kagome is dead and threatens Kaguya. Then Kaguya takes Kagome and tells InuYasha to follow if he desires.

Kaguya, whose power has increased exponentially now that she has the hagoromo, prepares to freeze time into eternal night. InuYasha meets up with Miroku and Sango, Kohaku, Kirara and Shippo, who survived the time freeze thanks to Kagome's bandages, which give them immunity, probably because they are from another time, again and they prepare to rescue Kagome and stop Kaguya. InuYasha then reclaims his piece of the robe of the fire rat that Kaguya had stolen. It is then revealed that Kaguya was in fact a demon who absorbed the real Kaguya and taken on her beauty and power. Kaguya tries to turn InuYasha into a full demon but his voice woke Kagome up and she attempts to stop the transformation by hugging him, saying " I like you as a half demon, InuYasha"! Because of that, InuYasha sees Kagome (in his mind) running toward him. As InuYasha tries to attack her, Kagome says "I love you. I love you as a half demon." This stops InuYasha from attacking. However, it doesn't work completely, to awake Inuyasha's human spirit, Kagome kisses him. Shippo becomes embarrassed and hides. Kaguya orders InuYasha to kill Kagome. During their embrace, Kagome mentally asks InuYasha, "InuYasha, you want to be with me, don't you"? While she thinks this, a tear rolls down Kagome's cheek. It works, as InuYasha and Kagome kiss, Kaguya's mirror cracks, returning InuYasha to his half demon form. InuYasha returns the kiss and tells Kagome in a hug, that he will remain as a half demon for her. But then Naraku reappears from Kohaku's back, revealing that he had purposely faked his death to draw Kaguya out. However, Naraku during this point in the series was still a half demon and thus wasn't able to battle her on equal terms. Kagome then combines her power with that of Miroku as she launches a piece of his staff in the form of an arrow and destroys Kaguya's mirror. InuYasha then manages to destroy Kaguya's physical form using his backlash wave (Bakuryuha). Kaguya shows up again in the form of a black cloud and attempts to absorb Kagome in an effort to gain a new body. However, she is killed by Miroku's Wind Tunnel attack; fulfilling Miroku's grandfather's wish. Naraku then escapes with Kohaku, Kagura, and Kanna through the broken mirror, followed by the others. Shippo, who was lanking behind in the tunnel but when he looks back, Kaguya is right behind. But he wakes up in a field. After the credits, Miroku causes Sango to slap him in the face once again while trying to kiss her. Miroku's excuse is that Kagome and InuYasha were being intimite. InuYasha and Kagome both turn deep shades of crimson upon hearing this. In the end Akitoki Hōjō throws Kaguya's hagoromo into a volcano to stop any other beings from ever using its power.