The Sakaguchi test is a test for the amino acid arginine. Arginine has a propyl group (three methylenes) with a guanidine group at the end. A guanidine group is a carbon with a single bond to two nitrogens and a double bond to one nitrogen. This guanidine group is what is being reacted in the Sakaguchi test. If you treat arginine with naphthol and an oxidizing agent like sodium hypochlorite, it will turn red in color. So if you have a peptide chain and you get a positive result from the Sakaguchi test, then you know that the peptide chain contains an arginine group.