The short and simple answer to your question from an out-of -state attorney is that the police who investigated determined that there was sufficient information to so charge your son. I'm hoping that his parents were unaware of the presence of the knife. If that assumption is not accurate then I would add for your benefit in coming to grips with how this could happen, take a look in the mirror. He needs qualified criminal defense counsel to assist him in defending the charge. Do not delay in the effort to get counsel. There are several highly qualified attorneys who participate on the website; hopefully one or more will respond to your question. After reviewing their comments, I would highly recommend that you reach out to them to talk in greater detail. You son needs this very badly.
First: This is a Juvenile Case. Records are sealed. You stated "They got into a fight." That's enough probable cause for an arrest right there. As to who did what to whom, that is for a trial or discussions for a plea resolution with the prosecutor to uncover.
In Minnesota, 5th Degree Assault can be one of two things. The State thinks that your son either:
1) committed an act with intent to cause fear in another of immediate bodily harm or death, or;
2) intentionally inflicts or attempts to inflict bodily harm upon another.
He doesn't need to take the knife out of his pocket to get convicted; he can be convicted simply by verbal threats.
Sounds like he may have an affirmative defense of self defense.
Even though this is a juvenile matter, it is very serious because 5th degree assault is an enhanceable offense, which means that a future offense will be more serious if he is convicted of this offense.
You don't state what your son's age is, but be aware that in Minnesota juvenile records can continue to haunt you into adulthood. I strongly recommend that you hire a good criminal defense attorney to represent your son. The collateral sanctions of this juvenile offense can be severe. I hope this helps and I wish you and your son the best.
Ms. Ackerman's evaluation of the statute and case is correct. I agree that self defense could be used to benefit your son. The act of fighting can be enough to charge your son with either assault or disorderly conduct (or both). Assuming your son has no record, it may be possible to resolve the case without your son being adjudicated as a deliquent (the juvenile equivalent to a conviction). Many prosecutors could be willing to offer deferred prosecution or diversion, which would require your son to meet some conditions (possibly anger class and community service), but the end result would be the case being dropped. If this type of resolution is not possible (a lot depends on negotiations with the prosecutor), then as previously stated there is a good argument for self defense.
I hope you find this information helpful and I wish you and your son the best of luck. Feel free to contact me if you would like to discuss the situation further.