McGregor was standing on the bar at Binny's Beverage Depot in Chicago when he told a bunch of his fans why the rubber match NEEDS to happen. TMZ Sports has the video.

"He fought me, he beat me. He gave me a rematch at the exact same weight, there was no hesitation, that's a true fighter right there," McGregor said.

"I have nothing but respect ... I owe him the trilogy now and the trilogy will happen."

Of course, Conor first fought Diaz at UFC 196 in March 2016 -- where was choked out and submitted in a legendary, bloody brawl with the fighter from Stockton.

Diaz agreed to a rematch at UFC 202 in August 2016 -- where Conor emerged victorious in a 5-round major decision.

There's been talk of a third fight for years -- but Conor has been chasing bigger money fights with guys like Floyd Mayweather and Khabib Nurmagomedov.

Conor still has a TON of options -- he's only 30 years old and wants rematches with Floyd and Khabib ... but it seems a trilogy with Nate is high on his priority list.

The UFC has gotta be excited about it too ... considering McGregor vs. Diaz I is the 3rd most bought pay-per-view fight in UFC history ... and McGregor vs. Diaz II is the 2nd biggest.

The #1 PPV of all time? McGregor vs. Khabib.

Conor recently talked about how he NEEDS to get the Khabib rematch too ... and famously posted a post-fight breakdown pointing out what he did wrong -- but many people think he needs to get a win under his belt before he steps back in the Octagon with The Eagle.

The other issue with Conor ... he says he wants OWNERSHIP shares of the UFC before he takes another fight.

What will the UFC do? It's a great question ...