Instructions
Complete Inuyasha's chapter in story mode. You begin story mode as Inuyasha. You must successfully engage six enemies in battle -- Koga, Miroku, Kagura, Kikyo, Sesshomaru and Naraku -- to complete Inuyasha's chapter. To unlock Demon Inuyasha, there is no special thing you must do in Inuyasha's chapter. You can continue even if you lose a battle and have to try again.
Win all battles in Miroku and Sango's chapter in story mode. After you complete Inuyasha's chapter in story mode, you unlock Miroku and Sango's chapter. In this chapter, you will battle against six opponents: Inuyasha, Miroku, Kagura, Sesshomaru and Naraku; you will fight against Naraku twice. There are no special requirements in this chapter to unlock Demon Inuyasha. You can play as either Sango or Miroku when the option arises. You may also proceed even if you lose a battle and must continue a battle from the start.
Finish Sesshomaru's chapter in story mode without ever losing a battle. After you complete Miroku and Sango's chapter, you will unlock Sesshomaru's chapter in story mode. You must battle against five foes: Koga, Kikyo, Naraku, Inuyasha and Demon Inuyasha. To unlock Demon Inuyasha, you cannot lose any of these battles even once. Restart the game in story mode from Sesshomaru's chapter if you lose a battle; do not click Continue. You will automatically unlock Demon Inuyasha after you successfully complete Sesshomaru's chapter in story mode without losing any battles.