The end of season two finds Miguel in a devastating coma, and season three is all about his healing journey. While in a coma, he can't stop having karate-themed nightmares, where he's constantly missing his opponent. Johnny breaks into the hospital to give Miguel a pep talk that brings him out of the coma, but he still does not have the ability to walk. Miguel ends up blaming Johnny for telling him to show mercy to Robby in the big showdown, leading to the coma and massive injuries. In response, Johnny and Sam pitch in to fund Miguel's experimental surgery (Johnny by stealing a statue, Sam by a car wash fundraiser) and soon enough, Miguel begins to get better. Johnny employs strange tactics to get Miguel to walk again (like lighting his foot on fire) and taking him to a concert actually works as the beat prompts him to tap his foot. (This show is not medically sound.)
On the personal front, Miguel is dejected as he feels his entire friend group has abandoned him. Johnny continues to help him walk, even using a harness, and Miguel inspires him to become a sensei again and open his own dojo. Miguel ends up gaining back his ability to walk (and fight), returning to school and joining Johnny's new dojo Eagle Fang. Sparks fly between him and Sam, leading to a budding relationship between the two. By the final episode, Miguel helps defeat Cobra Kai at the LaRusso house, defeating bully Trevor in the kitchen and getting his mojo back.