You start outside in a forest. After a short walk to the right, you will encounter some Wasps. Shortly after that, you will reach the first house (A), where you can purchase medicine. Remember that the price of medicine tends to increase each stage, so it's best to stock up before you advance to a new stage. The next house (B) beyond that is an Inn. After crossing the bridge, you will arrive at a castle. Pass through the door (C) to enter the fortress inside.
Although it may not be apparent, there are several levels to the fortress. The passages that lead between levels are rarely visible, if ever. After fighting one snake, you will reach a door (D). Inside will be a chief with information about a "mechanism." He is mostly likely referring to the roaming spiked bars that occupy some of the vertical passages.
On your way to the next door, you may encounter a Cyclops. They are stronger than Goblins, but no more difficult to fight. They will simply continue to approach you after your hit pushes them back. The next door (E) is a weapon shop. This is your second opportunity to purchase a Mace for 50 metal. If you did not buy one from the previous stage, you must purchase one now.
Beyond the shop, you will reach a section where the path branches between an upper and lower path. For now, stay on the lower path. After you fight some small monkeys, and a Cyclops or two, you will find yourself falling through an invisible hole in the floor. This will deposit you in a three level room with a hole in the floor and no obvious way to pass from one level to the next. The trick is to pay attention to the "columns" in the background. Invisible gaps in the floors tend to line up with these columns. As the spiked bars move back and forth across each level, follow closely behind until you find yourself falling through the floor. Continue to do this on each level, possibly allowing a bar to pass behind you if it will make it easier for you to advance to the opposite side. Eventually, you will reach the hole in the floor.
Unfortunately, falling through the first hole will only deposit you in a similar room, and you must repeat the process. When you fall through the second floor, you will see another strange new room. Spikes line the walls while blocks with dragon heads float back and forth. The truth is that you can ignore the entire right side of the room, and simply fall straight down the hole that you should land close to. Once again, you will find yourself in a repeat of the previous room. Continue to fall straight down.
You will land in a room full of gray bricks. You must use your Mace to break your way through them. Proceed to the right to find an invisible gap in the wall that will allow you to continue in the hall beyond. However, when you drop to the floor, turn around and walk through a second gap in the wall, and break a passage back to the left until you find a door hidden behind the blocks (F). Inside, you will find a shop where the lady will sell you your first piece of armor, the Protector, for 120. Definitely purchase this gear. If you do not have the money, walk along the corridor to the right until you collect enough and return. After you purchase it, the shop keeper will comment on the usefulness of the Lamp.
From here, you must simply walk all the way to the right until you see a door (2) on the floor. You will have to fight through snakes, monkeys, and Cyclops along the way. It does not matter which path you take, there are no surprise holes along the floor to fall through on your way. When you reach the door, enter it to access the second labyrinth.
The second labyrinth is considerably more deceiving than the first, particularly due to the one way drops that don't make it clear just how many floors you are dropping. Without this piece of knowledge, the existence of the rooms that you are meant to pass through in order to reach the boss may not be obvious. The occupants of this dungone are simply stronger versions of the monsters you faced in the previous labyrinth.
From the start, climb down to the room below, and proceed along the top level to the right until you can go no further. Than climb down the ladder, and return along the lower level until you are in the room immediately below the entrance. When you get there, climb down the ladder to the room below.
In this new room, continue to climb down the ladder to the room below, and do so once again until you are two levels down. You will actually drop through the ceiling with no means of return. From here, walk through the left door on the upper level. In the next room, defeat the Little Dragon and climb up the ladder. You will actually warp to one of the lower rooms near the bottom of the labyrinth.
In this room, walk through the single door on the right of the lower level, and then climb down the ladder in the next room to face the boss. The boss of this dungeon is a green Skulltas who a little stronger, but no more challenging to defeat than the previous labyrinth boss. Simply stand still, let the Skulltas walk up to you and rapidly swing your Mace up at his head while you take a little damage.
For defeating the boss, you will be rewarded with the Lamp, which will enable you to see in the darkness of the labyrinths to come. Escaping the dungeon is slightly easier, due to the ability to take advantage of some one way shortcuts. From the boss room, climb up to return to the room above, and continue to climb up the one way ladder to the next room above that. Then walk to rooms to the right (or left) to reach a ladder that leads down.
Climbing down this ladder will actually warp you to the top of the labyrinth. Walk on room to the right, and you will now be one room under the labyrinth entrance. Climb all the way up the ladder to leave the labyrinth.
Proceed to Stage 3
Once you exit the labyrinth, you will notice a small set of bricks above the door. You can climb up to the platform to the left of those blocks, and jump up to an invisible gap in the wall. Proceed to break the blocks to the right of the gap until you find a door. Enter this door (G) and you will be warped back to the very start of Stage 2. Return to the castle, and this time, take the upper route above the gap in the floor.
After defeating the Cyclops and reaching the edge of the platform, you will see a series of columns, each topped with a statue. Carefully jump from statue top to statue top while watching out for the small Gatos that fly through the area. After the last column, you will see a series of three innocent looking platforms that rotate around each other. Due to problems with the way the game registers collisions with the floor, it is incredibly easy to get killed on these platforms. In order to ensure that you survive the crossing, you must make sure that you jump on whichever platform is currently rising. You are safe on these platforms as long as they are moving upward. As soon as they begin to move down, you are at risk for falling through them. Once again, be sure to jump on to the platforms as they are rising, and leap off of them before they fall. You should be able to quickly hop across all three to arrive on the other side.
Continue right, jump over the gap in the floor, walk to the second to last column on the right, and jump up through the floor. Walk to columns back to the left and jump up through the floor to the top level. At this point, you can return to the gray bricks to your left and bust through them to discover a door (H) hidden behind them. Inside, you will find a second weapon shop that sells the Bronze Sword for 100 metal. The truth is, this weapon has the same strength as the Mace, so its purchase is debatable. If you have plenty of metal, feel free to buy it, but you can actually do just fine without it.
Back on the top level where you've jumped through the floor, walk back to the second to last column on the right, and jump up through the ceiling to reach the room above. It is yet another spiked bar room, only now you must climb through the floor to reach the ceiling. Again, use the left column and second to last column on the right to guide you.
Use your mace to bash through the bricks to the right. You will reach a door (I), and inside is a man who will tell you about the location of the labyrinth. After fighting your way through small Gatos that fly through the hallway, you will face one large boss Gato. It flies up and down, and advances a short distance when it flies back up a bit. It is only vulnerable to attack when it opens its eye, and it fires a spread of projectiles when it opens. Stand just inside attack range and wait for the eye to float to the floor. Rapidly attack it as soon as it opens its eye. After two rounds of attacks, you should be able to defeat it.
This easy boss is worth 10 EXP, and returns whenever you walk to the left a little before turning around and scrolling the area back on to the screen. Use it as an easy way to advance your EXP up to 99 at Class M before continuing on. After the boss is defeated, you can access the final door (J) and ask the man inside to advance you to the next stage (say "yes" to the first question.)