After you learn the code to enable diving underwater with the Sub-C, you reach a cave.

Explore the Chapter 2 Dungeon

Go north from the entrance.

Go north, but beware that Mud-o-Fish will come out of the water on the right side and move toward you, so be prepared to quickly hit them with your weapon to kill them before they can hit you.

Jump over the gap to the east and beware of more Mud-o-Fish from the right. Then go to the right and get the Baseball Bat. This is a weapon with a limited quantity, and it only hits the area one square all around you. This can be useful for hitting enemies that are diagonal to you. You can switch to it by pressing SELECT or by pausing the game with START and using the directional pad to select it.

Go north to the next room.

Beware of the Noctos flying around, then go west, being careful not to jump on the tile when it is disappearing. Go west and kill the Looper snake, and jump over another tile to go through the west exit.

The tile here doesn't disappear, so you can jump over it any time. There will be Mud-o-Fish coming from both the left and the right, so be careful. Go west to the next room.

Kill the three Noctos, then go north through the door.

Kill or ignore the Spinistar, then go west and carefully jump over the disappearing tile, then kill or avoid the Octots. To the west of the disappearing tile, there is some water, and to the west of that, there is a tile. Jump onto that tile to make a switch appear. Jump onto the switch, then go west and then north through the door.

You can ignore the Looper on the right, or use a baseball bat to hit it without having to walk in front of it. Go to the westernmost side of the room, killing the Looper along the way, then go north to where you can see a shadow next to the wall. Kill the Looper just south of that shadow, then walk through that shadow to go through a hidden passage. Pick up the double hearts and the Baseball Bats, kill or avoid the Nocto, then jump onto the bottom-right tile, then go east through the shadow in the wall. Step on the switch there (if there isn't a switch, read the previous sentence), then go north through the door.

Quickly stand in the middle of the four Spinistars and use a Baseball Bat (press SELECT to switch weapons) to kill them in one hit. (If you take too long, they will move away and you will have to chase them around.) Go north through the door.

Jump onto the tiles and go west, but beware of the Puff fish that appears out of the water and spits things at you. You have to kill all of the Octots to make the door open, so do that, then go west to the door and go north through the door.

Get the double heart, then go to the northern set of tiles, and jump onto the bottom-right tile of the northern set. Then jump on the switch that appears, and go north through the door.

One of the Noctos will open the door when you kill it. Try killing the one that flies to the bottom-left part of the room when you first enter. When the north door opens, go through.

As before, quickly stand in the middle of the four Spinistars and use a Baseball Bat to kill them in one hit.

Optional: Get a Magic Potion

You can optionally go north if you want a Magic Potion, which you can use from your inventory to restore five hearts. If you don't want the Magic Potion, skip to the next section. Otherwise, keep reading.

If you went north, go west to the next room. One of the Loopers will reveal a passage to the south when it's killed, so kill the Loopers to reveal the south passage. Go through.

Jump onto one of the north tiles, then jump south to get the Magic Potion. It restores five hearts when used. You can use it by pausing the game with START, then pressing down with the directional pad and selecting the Magic Potion.

Jump onto the bottom-most eastern tile to reveal a switch, then go north and step on it. Go east through the passage that was revealed.

Go to the Boss

Kill or ignore the Spinistars if you haven't already, then go east through the shadow in the wall.

Jump onto the east tile, then jump onto the switch. Take the Snowman Doll that appears. Then jump onto the north tile and step on the switch, then go north through the door.

Kill the four Octots while dodging the things that the Puff Fish spits out. When the Octots are gone, the north door opens. Go through.

In here you will see the Dolphin's son. Kill the Octot and go north through the door, and you will have to battle Octo the Huge.