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Kabuto is one of Orochimaru's followers. He is a spy but he doesn't want to expose his cover, that's why he purposely failed the Chuunin examination six times! But even though he is good at hiding, all the sensei know his secret.

Kabuto is actually a Genin, which is revealed in the manga, Volume 4, Issue 5, Page 59. The assumed Jounin level is because of a conversation Orochimaru has with Kabuto right before the final rounds of the Chuunin exam - it occurs in both the manga and the anime, and Orochimaru says "You may be stronger than Kakashi, but you are not at my level yet".

It would also be essential to mention that he's a very good medic, and Tsunade even says about him that he is far better than she was at the same age. Orochimaru uses his medical talents to perform a number of surgeries on himself (such as making his transfers to other bodies successful or taking care of him after the Third nearly killed him) and on a number of his most powerful followers (Kabuto maintained Kaguya Kimimaro's life when his mysterious illness took him).

Kakashi realized that Kabuto had been adopted from a battlefield by a Konoha Medical squad Leader, and has had medical training from childhood. Kabuto has the ability to heal his own injuries directly, without using his hands to manipulate chakra for healing, and his self-healing abilities are so great he was able to survive (barely) a direct hit from a Rasengan. His main weapon is the use of a chakra scalpel and his medical knowledge to cause injury instead of healing.

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