Chances are that you have collected every item in Sifu, except for 1 in the Sanctuary. You may even have searched far and wide, but scratching your head as to where it could possibly be?

Alright, first things first. Make sure that you have completed the game first (defeated Yang), before following this guide. Upon your first game completion you’ll unlock the ability to spare boss enemies. 

By now you’ll be more than familiar with the “stun bar”, which displays above enemies.

Once you fill it up completely – by blocking and attacking – you’ll be able to instant KO the enemy or boss.
Don’t do that now.

Instead, fill it up completely, but do not attack when the prompt shows. After a few seconds the prompt will disappear and the battle resumes, with the stun bar having decreased slightly.

Fill it up again, and this time you’ll have the option to either KO, or spare. Choose spare to end the battle with a special cutscene, where you are rewarded a Talisman.
Your goal is now to collect all 5 Talismen in the game – one for each boss – by following the process explained above. This process applies to Fajar, Sean, Kuroki and Jinfeng. Please note that stun bars reset in phase 2, so this can only be done in phase 2 of each battle.

If the boss is running low on health, focus on increasing the bar by blocking attacks. If you kill a boss in a future attempt after saving it, you will not lose the talisman. 

Finally, there is Yang. His battle is much the same, as in the sense that you spare him in phase 2. After sparing him however, a cutscene will play and a third phase will commence. Don’t worry as you cannot die in this phase. Your only objective is to max out Yang’s stun bar to deliver the final blow.
This will not kill him. Instead this will play the secret ending (aka true ending) and the (probably final) message piece on your discovery board is awarded. Check back after the ending plays to take a look at it.

If you prefer a video, refer here:

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