Without a spiritual leader the Bajoran people hadn't been reunited since the end of the Occupation. Many Bajoran citizens had formed or joined various extremist groups, the most prominent one being the "Circle" which demanded that all non-Bajorans be banned from Bajor. The group was responsible for organizing terrorist acts against the Bajoran Provisional Government, blaming the government for taking too long in their efforts to rebuild Bajor and calling in the Federation. It was found that the Cardassians were supplying the Circle with supplies via another race, the Kressari. It was the plan of the Cardassians to provide support to the Circle from behind the scenes so that enough Bajorans would join it to eventually rid the Federation presence from Bajor. At that point Bajor would be thrown into civil war, and the Cardassians would be able to retake the planet. The Circle became aware of the Cardassians' plans when Major Kira (Deep Space Nine's First Officer) and Lieutenant Jadzia Dax (DS9's Science Officer; a Trill joined to the Dax symbiont) were able to convince them they were being influenced, with the evidence that Odo had found. The Circle was destroyed, and the Cardassians' plans foiled.
After over a year without a spiritual leader, Bajor was about to elect a new one. Former Kai Opaka's personal choice, Vedek Bareil, was running against Vedek Winn who was determined to let Bajor know about Bareil's past. She claimed that during the Occupation, he had told a group of Cardassians where Kendra Valley was so they could go there and murder the Bajoran population. This was found to be true, though he only did it to keep them away from a larger town where thousands would have been killed. Bareil decided to withdraw from the election, and Vedek Winn became the new kai. Many Bajorans, especially Major Kira, hated Kai Winn for the actions she took during the election. It was later found that Vedek Bareil was only covering up for former Kai Opaka, who had sacrificed her son and Kendra Valley in order to save thousands of other Bajoran citizens.
Season two ends with the beginning of Deep Space Nine's major crisis, which develops and lasts for the remainder of the series. During a trip to a beautiful, uninhabited planet in the Gamma Quadrant, Commander Sisko, Quark (bartender on Deep Space Nine), and a Vorta they met on the planet were taken prisoner by the Jem'Hadar. The Jem'Hadar told Sisko they were the soldiers of the Dominion (the major political power of the Gamma Quadrant) and that they would no longer tolerate any ships breaking their sense of order by coming through the Bajoran Wormhole. Word got back to the station about Sisko and Quark's capture, and Starfleet launched a Galaxy Class starship, the Odyssey, along with two runabouts from DS9 to rescue them and disable the Jem'Hadar in a space battle. The Odyssey remained to fight off the Jem'Hadar after Sisko, Quark, and the Vorta were safe on Deep Space Nine, and the crew of the two runabouts were shocked when the ship was destroyed in a suicide run by a Jem'Hadar ship. The Dominion was obviously an incredibly determined and serious people. It was later found that the Vorta who had been captured with Sisko and Quark was really a Dominon spy, showing us that the dealings with this new enemy had just begun.