I can appreciate the advice you've been given so far, but let's be realistic: if things get physical with this guy, you ARE going to get your a** kicked up and down. You could possibly take him in a one-on-one fight, but his friends aren't going to sit idly by and watch you kick him in the balls and eye gouge him. If he doesn't pummel you solo, they will jump in and turn you into hamburger meat.
The old adage about bullies, "if you stand up to them, they'll go away," is bullshit. If it were true, there wouldn't be bullies anymore, and you wouldn't be in this situation. The attitude that you have about this is admirable, but it isn't going to solve any problems for you. You either need to figure out how not to fight this guy, or you need to be prepared to get your a** kicked.
Either way, you need to tell your school administrators NOW about what is going on. The school counselor is probably your best bet, but make sure the principal hears of this also. Realistically, you should expect them to do nothing. After all, they probably hear this a dozen times a week, and they're busy with meetings, paperwork, and their normal job duties and don't have the time to babysit guys like him. This is fine. What is important is that you've established that the other guy is the aggressor, and you have also made them culpable in the event that they allow the bully to continue his behavior.
Next, have your parents call the police and file a report. Note that filing a report is different than moaning to the cops about what's happening. There needs to be real documentation of his threats, to include locations, dates, and witnesses if at all possible. Again, the cops will likely do nothing further at this point. It may warrant an officer dropping by the bully's house to talk with his parents, though, at which point I expect your problems with him will immediately stop. Either way, you have your bases covered.
The next part is up to you. If the bully tries to fight you, then you might as well blacken one of his eyes before his posse beats you senseless. However, you need to watch your mouth carefully. If you are seen antagonizing him in any way, the repercussions for him will be minimal or none. You need to beat this guy by keeping a cool head, and letting life come down on him. If he engages you, defend yourself. After that is when the real beating begins. Talk to the school staff and explain what happened. Being that you gave them advance notice of the situation, your parents are in an excellent position to sue the school board. This should be more than enough motivation for them to expel him and send him to an alternative school. There, he'll experience the other end of what he's been doing to you and the other kids, over and over.
Next, have your parents call the police and press charges. At worst, this will earn him some community service and a fine, and at best, it will send him to a juvenile detention center. Either way, his parents are likely to give him 10x the beating that he tried to give you. By the end of everything, he'll probably never see you or his punkass friends again.
If you think that using the system is cowardly, then you're probably going to have to run into this situation a few more times before you learn better. The vigilante justice that you want to dish out is probably going to get you messed up even worse. Be smart, cover your bases, and let the consequences of his crappy decisions be your revenge.