He tells her most of the truth

Naruto decided that he would tell Hinata the truth but leave the details about the 9 tailed fox out.

While Naruto was telling her the story, Hinata had a blush on her face like usual when she is around Naruto. She knew that he was strong but to master the shadow clone jutsu in a few hours and stop a traitor aka Mizuki was impressive.

Naruto looked towards the nearest clock and saw that they were running out of time so he told Hinata that they should get going before they both got in trouble.