The body of Phuong (Bob) Huynh, 52, of Garden Grove was discovered near Garden Grove Boulevard and Court Street around 7:20 p.m.
Huynh was pronounced dead at the scene as a result of multiple stab wounds.
On Sunday, deputies arrested Daniel Perez-Munoz, 21, of Garden Grove, for murder.
During the investigation, deputies learned Huynh was stabbed during an unprovoked altercation with Perez-Munoz in the alleyway.
Based on witness statements and evidence recovered at the scene, Perez-Munoz was located and detained shortly.
Perez-Munoz was booked into Orange County Jail in lieu of $1 million bail.
The investigation is ongoing. Anyone with any information regarding this incident was urged to contact Orange County Sheriff's Department Homicide investigators at (714) 647-7000.