After you give Dad his missing papers and befriend Wazzat, you get a Bicycle from your Dad and take it for a spin.
Let's Ride a Bike!
You can ride your bike by pressing down on the + Control Pad. Go west to Blossom Heights, then south to Shopper's Row. From there, go south to Flower Road.
Go to the south end (you can buy vegetables and meat on the way) and go into the bookstore. You find the shopkeeper arguing with a suspicious businessman. Apparently the shopkeeper keeps getting visits from businessmen who want to tear down Flower Road and turn it into a generic shopping mall. The "Guardian Angel" of Flower Road will be homeless if that happens.
Guardian Angel's Curse?
The shopkeeper is too busy to tell you more, so he says to ask your science teacher about it.
Go to the north end of Flower Road to find Mr. Barton. Talk to him. Strange things have been happening at Flower Road, such as a fire, after the mall talks began. Your classmate Lucas was there, so Mr. Barton says to ask him. He was at Everymart.
Use the south exit of Flower Road, then go east to find Lucas. He says that the fire seemed to spontaneously start. Whisper believes that a Yo-kai started the fire. Lucas says that the fire started near Nocturne Hospital, which shut down recently.
Nocturne Hospital
Go south to find the hospital. You will have to go through the hole in the wall. You discover a Yo-kai called Kyubi. He wants to fight you, but says to meet him at the construction site downtown at night.
Springdale's Protector
If your watch is still Rank D, you need to go to Timers & More and complete Mr. Goodsight's quest to upgrade it to Rank C. Otherwise you won't be able to get into the construction site. For Mr. Goodsight's request, you can't just defeat random Yo-kai. You have to find specific ones in the locations that he mentioned. There is a Signibble in the Academy Shortcut, which is an alleyway in Downtown Springdale, near the Academy buildings. There is a Suspicioni in the alleyway behind Frostia's Place restaurant in the northwest of Downtown Springdale. There is a Tantroni in the Delivery Bay, which is another alleyway, and is also in Downtown Springdale.
After you have upgraded your watch to Rank C, go home and sleep in your bed until night. Then go to Downtown Springdale and go to the construction site. You will need to have a Rank C watch to get in, so if you don't, then you should read the previous paragraph.
Follow Kyubi
Open the C Lock with your Rank C watch, then go in and talk to the Yo-kai in the corner. This is Komasan, who came here for the country and wants to ask Kyubi to help him find a place to live. But there are too many Yo-kai in the construction site, and Komasan can't reach Kyubi because it's too scary in there.
Since Kyubi challenged you, you want to go in and find him. Komasan asks you to take him with you so he can prove to Kyubi that he's not a scaredy-cat. You befriend Komasan.
Now you can go inside. There is an Eyepo near the entrance. Go north and then west. Go up the narrow hallway in the upper-left, then use the escalator to the right.
Go to the bottom-left, then go along the south part of the room. You have to walk along the narrow beam, and if you fall off, you will fall down to the lower floor. There are treasures down there, though, so you might want to go down there. If you do, just use the ladder to go to where the rope is. Ignore the rope and go to the left. Then go up the escalator there.
Go up the rope to the right. Then go toward the left. Komasan gets the feeling that somebody is watching you. You and Whisper don't seem to notice the huge Yo-kai looking in through the window. Go south and follow the path counter-clockwise around the construction site. When you pass by a rope, go west and you will see an Eyepo in the map. Go toward it. Heal and save if you want to, then go north through the door.
It's Kyubi! It turns out that Kyubi wasn't the one who has been causing problems at Flower Road, it was Massiface, the giant Yo-kai that Komasan sensed earlier. It attacks!
Kyubi's Truth
After the battle Kyubi admits that he lured you to the construction site on purpose to get rid of Massiface for him. He says he'll continue as a guardian there until you "learn the truth". You're not sure what he means by that, but you're going to try to find out.
Next, you're planning to go to Eddie's house in Breezy Hills. This begins the chapter Eddie's Search