Beat the game in "TAG TEAM" Mode with the difficulty set to VERY EASY with only one character (don't let anyone join you) in under 21 minutes. You'll get a new stage next to the ring with a Tokyo Theme to it.
When in combat and someone sends you flying on your back, before you land: slide your finger back and forth across the C buttons (all four of them.) If done correctly, your fighter will land on their hands and roll backwards to avoid any unpleasant follow-ups.
Before selecting your player, hold the L button and press left or right on the digital pad. The rotating character pictures will change color indicating the trick worked. Keep holding L and select your character.
Enter the Reiji secret character code. When your life bar is about one-third full, press R and L together and he should transform into Yami or Hikiri.