Kakashi's Anbu Arc: The Shinobi That Lives in the Darkness

is an arc of the Naruto: Shippūden anime. It covers episodes 349 to 361. The arc focuses on Kakashi Hatake's Anbu background, while also exploring the backgrounds of others such as Yamato and Itachi Uchiha. This arc takes place in the middle of the Fourth Shinobi World War: Climax.

Kakashi's Trauma
The previous Ino–Shika–Chō is sent out to complete an Iwagakure treaty mission. Iwagakure doesn't intend to keep a peaceful treaty, but as the meeting happened at the border with the Land of Wind, the Fourth Kazekage ensured no fights would break out near his country. The Iwagakure-nin return and update the Third Tsuchikage about the events. In Konohagakure, Kakashi still feels guilty about his role in Rin's death. In a meeting with the council, Hiruzen decides to step down in favour of a new Hokage. Danzō proposes Orochimaru, but Hiruzen suggests Minato over him. Minato takes over as Hokage, and when Kakashi continues to struggle with his trauma, Minato has Kakashi become an Anbu. Kakashi becomes as an Anbu, frequently killing opponents in cold blood. To mitigate this, on Hiruzen's suggestion, Minato has Kakashi do surveillance on Kushina, whose pregnancy as a jinchūriki becomes a matter of great importance, as well as hoping that a more cheerful mission will help him.

When the Nine-Tails attacks Konoha, Minato and Kushina contain it at the cost of their lives. Kushina lives just long enough to tell Hiruzen Naruto's name and plead to protect him. Hiruzen resumes his duties as Hokage, and Danzō invites Kakashi to be part of Root. Upon first reporting, he meets another Root agent, one who is capable of using Wood Release. Intrigued by it, Kakashi breaks into the Hokage's residence to search for secret files on those abilities, and is caught by Hiruzen, who shares with him the story of the village's early experiments to replicate them, and the disappearances that came with the experiments. Danzō plots to have Hiruzen assassinated, but Kakashi foils his plot. However, he allows the would-be assassin, the boy with Wood Release, to escape, certain that his ability will one day be valuable to Konoha. Kakashi tells Hiruzen about Kinoe's existence, and continues to be an Anbu under his command.

Orochimaru's Defection & The Iburi Clan's Downfall
When Orochimaru's illegal experiments are discovered, Hiruzen leads an Anbu team to apprehend him, but is incapable of killing his own student, allowing Orochimaru to escape. Kakashi tries to deter Orochimaru from leaving the country's borders, but is defeated. Orochimaru is injured by an exploding tag hidden inside a snake. Danzō sends Kinoe to aid Orochimaru leave the country, and when he reaches a meeting place, he encounters a clan who can turn to smoke, that is also loyal to Orochimaru. One to the clansmen, Yukimi, believes Kinoe to be her long-lost brother Tenzō. Kakashi arrives at the clan's hideout, and is attacked by another member, Gotta. Kinoe prevents Gotta from killing Kakashi under the pretence of interrogating him, and reveals to Kakashi that his true mission is to stop Orochimaru from leaving the country, as his great knowledge from his experiments would be detrimental to Konoha if he left the country. Gotta, who had been listening in, attacks both of them, but Yukimi helps them escape. Yukimi possesses Kinoe so she can experience the outside world without having to worry about the wind dispersing her in her smoke form, and Gotta begins fighting Kakashi again, before he himself is fatally dispersed as smoke. With his dying breath, he tells Kakashi that Orochimaru is after Yukimi. Kinoe refuses to sacrifice Yukimi when he learns this from Kakashi. Orochimaru reaches the Iburi clan's hideout and begins attacking them for their blood, desperate to acquire their ability.

While Kakashi and Kinoe fight, Yukimi escapes and goes back to her clan's hideout to save them, but arrives only in time to see them dead by Orochimaru's hand. Kinoe and Kakashi reach them, but Orochimaru is able to capture Yukimi. The two are able to track Orochimaru down with the help of the deceased clansmen, whose smoke leads them where Orochimaru tries to acquire Yukimi's ability. The stress is to great on her, and she begins to turn to smoke, so Orochimaru escapes. Kinoe tries to contain Yukimi's smoke with his Wood Release, and is aided by the smoke of her deceased clansmen, managing to return her to human form, her ability stabilised. Yukimi departs, and Kakashi tells Kinoe that he won't report having found Orochimaru or the Iburi clan.

Kinoe's Mission
Three years later, under the orders of Danzō, Kinoe, along with Kinoto sets out to take Kakashi's Sharingan. At the same time, Kakashi is sent by Hiruzen to investigate a newly found hideout of Orochimaru's. Kinoe and Kakashi encounter each other there and agree to work together, however, Kinoe soon attacks Kakashi in an attempt to take his eye. Kakashi pleads Kinoe to stop, telling him that comrades shouldn't kill each other. Kinoe brings up the fact that Kakashi killed Rin with his own hand, enraging him and pins Kinoe to the ground, preparing to strike him with his Chidori. Kinoe resigns himself, telling Kakashi to kill him if need be.

As Kakashi leads a tied up Kinoe out of Orochimaru's hideout, they are suddenly attacked by giant snake. Although the snake swallows Kinoe, Kakashi saves him by killing the snake. Kinoe is baffled about this, wondering why Kakashi would save someone who tried to steal his Sharingan. A poisonous fog released by the dead snake weakens Kakashi to the point he has to be taken to a safe spot, and is cured thanks to Kinoe. Due to his new-found respect for Kakashi, Kinoe is unable to steal the Sharingan, and creates a fake wooden Sharingan to give to Danzō instead. Enraged by Kinoe's deception and failure to finish his mission, Danzō orders his subordinates to place a cursed seal on him. Kakashi goes to save Kinoe after reporting to Hiruzen about Danzō's actions. They are eventually cornered by Danzō and his members, but Hiruzen arrives in time to save them and convinces Danzō to let Kinoe join his Anbu instead. The following day, Kakashi introduces Kinoe to his new Anbu comrades, and Kinoe decides to change his codename to "Tenzō", after encouragement from Kakashi as he is no longer a member of Root.

The Uchiha Tragedy
About two years later, Itachi joins Anbu, becoming its youngest member ever. While his father stresses Itachi's obligation to the clan, Danzō tasks Itachi with monitoring the Uchiha. Hiruzen sends a team containing Guy, Kosuke Maruboshi and two other ninja on a diplomatic mission to meet with envoys of the Land of Woods, and Danzō sends Kakashi and Itachi as back-up in case they're double-crossed. The Konoha-nin are betrayed, as expected by both Hiruzen and Danzō, so Kakashi and Itachi eliminate the envoys. Guy requests to Hiruzen that Kakashi be discharged from his Anbu duties, as he believes it's not doing Kakashi well. The Konoha Council decides that the Uchiha clan is to be put under constant surveillance, something Itachi reveals to the Anbu the Uchiha already expected this move from Konoha.

The Konoha Military Police becomes harsher with citizens in response. Reporting from a mission, Shisui requests Hiruzen permission to act independently to try dissipating tensions between the village and the clan. He also reveals to Itachi that the clan tasked with spying on Itachi, since other Uchiha have lost trust on him. When Shisui loses hope of dissuading the Uchiha from following with a coup d'état, he plans to use Kotoamatsukami on Fugaku. Before he can do so, Danzō attacks and steals Shisui's eye, fearing that someday Shisui would use Kotoamatsukami on him if it came to it. Shisui entrusts his remaining eye to Itachi and commits suicide, causing Itachi to awaken his own Mangekyō Sharingan. Itachi is promoted to Anbu captain by Danzō and thanks Kakashi for their time together as a team.

Hiruzen tasks Kakashi with finding out who is bypassing the village's barrier, and senses hostility while verifying the barrier's placement in the Uchiha district. Itachi reports to Danzō that a coup is imminent, and requests the masked man's help in annihilating the clan. The Anbu arrive too late to stop it, and instead begin clearing the district up. Itachi warns Danzō not to harm Sasuke, or else he'll leak information to enemy nations. He also meets secretly with Hiruzen, informing him of his future actions, and asks that he protects Sasuke. Hiruzen decides not to change the barrier's pass code, allowing Itachi to enter the village undetected to check on Sasuke. Kakashi is discharged from Anbu, and is told he'll become a sensei to a genin team.

Jōnin Leader
Despite his assignment to mentor a genin team, Kakashi consistently fails the teams he tests over their lack of team-work, wanting to make sure that no team will ever suffer the same losses his team had over what Kakashi perceived as improper team-work. Kakashi's interest is sparked when a team similar to his own, consisting of his sensei's orphan, Itachi's brother, and a clever kunoichi are to be evaluated by him. Despite his initial reservation and disappointment while meeting them, the team is able to grasp his lesson in team-work, ignoring the rules when one of their own needed help. Kakashi passes them and officially becomes their team leader.

Trivia

 * A plot hole is in Part I of the series, when Kakashi met Orochimaru during the Chūnin Exams, Orochimaru had mentioned that Kakashi hadn't had Obito's Sharingan when they last met, while Orochimaru had met Kakashi after receiving Obito's gift during this filler arc.