First off head down and to the left to the Moggle under the Item sign for this town's store.
Quick Blitz -- 400 Munny
Fire Edge -- 1800 Munny
Sliding Dash -- 400 Munny
Heat Dash -- 1800 Munny
Round Blitz -- 400 Munny
Fire -- 800 Munny
Slow -- 800 Munny
Potion -- 120 Munny
Ether -- 200 Munny
You can create more powerful attacks in your Command Matrix by combining items. 2 Fires will take you to Fire lvl 2. Where Sliding Dash plus Fire equals Heat Dash. Mess around with various combinations to find attacks that work for you.
Traverse Town Prizes
Now we want to clear out the Prize Bloxes of this section of town. Head to the back left of the accessories shop and there will be your first Bouncy Blox. Jump onto the Bouncy and over to the Prize Blox hitting it as you come by. There is a second Prize just above that one in the small walled off area. Then head to the right side of the city and climb the ladder and then Bouncy Blox to the right building roof. Jump over to the right to the next Prize, BLANK CHIP and then back to the last building roof. Now head down the roof and use the next Bouncy Blox to get to the final Prize in the area which is a THUNDER. Head through the large double doors in the top left to head to the 2nd section of the town.
There are 4 more Prize Bloxes in this section which are all out in the open. Then head back to the top right to help Huey out with some Heartless. Once they are eliminated you'll get a FIRE for your effort. Talk to Huey and immediately afterwards you'll be attacked by a new Large Body Heartless. Stay back and attack it with your magic attacks. Once it is down you'll get attacked by more standard Heartless and finally one more Large Body. Then Huey will give you the Mystery Piece and tell you to head to the Alley. Before you leave the area though head around the back right of the metal bloxes that Huey was standing on to get a BLANK CHIP.
Head back to the central area and a scene will show you the door to the Alleyway. Head through there for the next area. Work your way through the Heartless to the end of the alleyway and take the only right. Climb the ladder and jump from Metal Blox to Metal Blox until you get to the Prize Blox that contains a HP 2 CHIP. From there jump from balcony to balcony until you reach Dewey. He'll give you a THUNDER. Follow Dewey back to the Second District.
Back in the Second District you and Dewey will get into a fight with a Large Body and some Heartless. Sure your ranged magic on the Large Body and the battle will be over quickly. Then you need to find the next System Sector. It's on the west wall on the ground floor of the main area.
Fire Charm (Activates the “No Ignite” abililty, which prevents enemies from igniting you.) -- 300 SP
HP 2 -- 140 SP
Magic 1 -- 140 SP
Fire -- 90 SP (Can buy multiples, price increases each time)
Sliding Dash -- 140 SP (Can buy multiples, price increases each time)
The first room is a Blox Snake. Wait for the tail to become standard Blox to break them off. Then attack the head. Use everything you have. It moves all over the place so be careful not to get hit and rotate your view to keep it in sight the entire time.
Once you leave you'll get the Mystery Piece from Dewey. Then head back to Cid where you started at the very beginning of the main Traverse Town area. After the conversation Cid will give you a new finishing move: SPEED COMBO.
As you head back to Second District you'll find that the door is gone and you need to locate another backdoor / system sector to move on. This one is located right behind you on the door of the accessory store.
Wizard's Armlet (Activates the “Magic Boost” ability, which boosts your Magic when you are down to 25% HP.) -- 280 SP
Strength 1 -- 150 SP
HP 2 -- 150 SP
Heat Dash -- 110 SP (Can buy multiples, price increases each time)
Quick Blitz -- 110 SP (Can buy multiples, price increases each time)
Use the Bounce Blox in front of you to get up to the Metal Blox platform. Make sure to grab the Prize before bouncing up higher. Then bounce up to the highest floor and eliminate all the Heartless. The link is on the ground floor.
Floor 2 introduces the Ghost Blox. These Ghost Bloxes are green and they alternate between empty space and being solid. Just watch for them to appear and make your jumps. When you get to the middle level you can run around the Ghost Bloces to get 2 Prizes Bloxes. Then make your way to the top level and eliminate the Soldier Heartless that is there and get the Prize before falling back to the first level and the exit.
The final floor has a mixture of Ghost Blox and Bounce Blox. There are several Prizes to be had as you make your way around this final floor. The last section has a tower of Ghost Bloxes. Watch the timing and jump just ahead of the change to the get to the top and its 4 Prize Bloxes including one containing a THUNDER. The final enemies are on the Metal Bloxes area just below the final top level.
Now back in Traverse Town the door is back and you can go back to the Second District. Use the Bounce Blox on the left to get to a series of Metal Blox and Prizes. To get to the far roof and it's DEFENSE 1 CHIP you need to jump and then use a Heat Dash or other Dash move to get to the roof. Then head into the Third District via the side alleyway.
When you get to the Third District you'll get attacked by a large group of Soldiers, followed by a Large Body and then many Red Nocturnes. Red Nocturnes float high in the air and fire magic at you. You can hit them with normal attacks though, Sora will launch into the air on his own to attack. After the battle you'll be told to follow the stranger.
Back in the First District you'll see the stranger again and then you'll need to find another backdoor. The door is the door you just came through from Third District.
Energy Bomb (Surround yourself with orbs of light, then detonate them all at once) -- 300 SP
Magic 1 -- 100 SP
Strength 1 -- 100 SP
Fire Edge -- 70 SP (Can buy multiples, price increases each time)
Round Blitz -- 70 SP (Can buy multiples, price increases each time)
This Sector is one large floor with doors leading to 3 extra areas. Just head to each area and eliminate all the enemies until the floor turns to blue. Once all 4 areas are cleared you can exit the Sector. Make sure to grab all the Prize boxes for added SP to buy your Rewards with.
Talk to Sid and then head into the Second District yet again. Get all the Prizes and then head to the far end of the area to talk to Louie. This will lead to another backdoor. This one is on the west walkway.
Blizzard Charm (Activates the “No Freeze” ability, which prevents enemies from freezing you) -- 300 SP
Lucky Strike (Increases your Luck by 1) -- 200 SP
Magic 1 -- 200 SP
Rising Strike -- 200 SP (Can buy multiples, price increases each time)
Thunder -- 200 SP (Can buy multiples, price increases each time)
This Sector introduces Slider Blox. You can move the Sliders with your Keyblade to new positions. Floor two adds Pair Blox. A Blue and Green Blox that when hit together become a Prize Blox. This floor's Pair Blox are pretty straightforward. Floor three has moving Metal Blox. Stat by pushing the Slider to the Red wall and using it to get to the Bounce Blox. Then across the Metal Blox to the next upper area. Fall back to the ground and head up the ladder in the North West corner. If you've gotten all the enemies the exit is up here.
When you are back in Second District jump up the Metal Blox in front of you to get to the roof and ultimately Louie. He'll first give you another Mystery Piece and then a BLIZZARD. Afterwards head back to the First District.
Side Scrolling Area
You'll get another scene and then you are introduced to the side-scolling areas. You don't get your command matrix but every diamond you pick up contains a limited use ability. You lose points every time you fall or get crushed by not keeping up. It's important to get all the abilities as you go since they one hit destroy a large area of bloxes and enemies.
BOSS: Guard Armor
Keyblade -- Wishing Star
BOSS: Guard Armor
Red -- Fire Lunge (A Fire Dash Ability)
Yellow -- Thunder Rain (BEST - A cascading attack in a directions)
Green -- Wind Spin (A whirlwind attack that rises you up)
Blue -- Blizzard Dart (A attack that shoots balls from a blizzard above your head)
The key to these stages is to use the abilities they give you each and every time you get one. You want to rack up as many points as you can as fast as you can. Stage 3 is the boss battle. I would save your ability for Stage 2 of the battle as it's much harder. Stage 1 is a quick beat him up. In Stage 2 the Guard Armor will drop Bloxes and then try to hit you with a Laser Beam. Destroy the Bloxes quickly to get out of the way of the Laser. Then the Guard Armor will hop around. Make sure you are not under foot. Near the end he will summon Heartless to help you. Destroy the Heartless quickly for a minor health boost. After the battle you'll get a Keyblade upgrade and then end up in Wonderland.