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From Sonic Retro

The homing attack is a special move for Sonic that was first featured in Sonic 3D: Flickies' Island, but required a special shield to use in that game. It was added as a standard move in Sonic Adventure and has been included in all 3D Sonic games since. It can be achieved by pressing in mid-jump. Use this attack to have Sonic automatically zero in and strike any nearby enemies. If no enemies are within range, use this move to have Sonic perform a jump dash; in Sonic 3D Blast, Sonic would instead go straight down.