Location: Desert Near Alubarna
Petitioner: Kung Fu Dugong
Reward: Kung Fu Dugong's Treasure
Objective Reward: Bronze Bat Soup
Ah, jeez, not these guys again. In order to trigger this third (and final) encounter with the Kung Fu Dugongs, you need to have completed the second step in their questline, Master and Student Rematch. You also need to travel to the Desert Near Alubarna, which won't happen until you've been to Rain Dinners Casino.
Once you're in the Desert Near Alubarna, travel west from the Royal Army Garrison and across the bridge leading to the base of the Rebel Army. The Kung Fu Dugongs are practicing on the west side of the bridge. (You can also find an Usopp's Cube Fragment that's sitting right beside the critters.)
Shockingly, the Kung Fu Dugongs want to spar with the Straw Hats. Again. Having fought stronger versions of Kung Fu Dugongs earlier in the game as random enemies, it's unlikely that the trio will give your party any trouble. Zoro will take them down without much trouble. Defeat the Kung Fu Dugongs and you'll be interrupted by a Sandora Dragon, which clearly wants to eat the Dugongs. You've fought these a few times now, and Usopp / Nami should make short work of the thing.
Trouncing the Sandora Dragon will bring this odd little tale to a close, and you'll earn your reward. The Dugongs will declare that they plan to become pirates, though, so... maybe they'll show up again...?