Katazu is a swordsman living under his twin brother Kageki's assumed identity. The switch happened after Shikazo's death—which was actually an accident. Kageki had lent Shikazo money, but when Kageki asked for repayment after his child was born, Shikazo refused. They fought, Shikazo hit his head on a rock, and that was that. Desperate, Kageki turned to Katazu, who agreed to take on his brother's name and life while Kageki and his family disappeared. Katazu deliberately drew Shikazo's pursuers to himself as cover for them.
Tsukado ended up with a vendetta against Katazu—his clan wanted him dead. He challenged Katazu 34 times and lost every match. Then Kanabun showed up, smelling profit in their rivalry, and forced another confrontation. It looked like Tsukado finally had the upper hand with Naruto's assistance, but Naruto noticed something didn't add up about Katazu being Shikazo's killer. Once the truth came out, Tsukado backed off. He wasn't interested in killing someone over a lie.
Kanabun and his crew tried pushing the two swordsmen into fighting again, but Katazu, Tsukado, and Team 7 chased them out of town instead.
Content compiled by AnimeList.moe from publicly available sources.