While traveling through the mountains of Len Bal the Ruler Daniel encounters 2 sketchy men up to no good. They attack you since you heard a small fragment of their plan. You start out without any items or monsters so it is not possible to win.
After losing the battle Daniel wakes up in someone's house. Here he meets Kal and her grandfather, Wolf. They explain how they found you and offer their help. In return for helping Daniel promises to look for Odyu - Book 3 for Kal.
Encounter: Acorn and Uru
Leave the house and an encounter will begin against Acorn and Uru. They both can easily be defeated by walking up to them and attacking them yourself since you don't have any monsters yet. This should take 2-3 turns if you immediately walk up to the closest monster and attack them promptly.
Meeting with the Town Chief
Go to the left until you see an old man in the plaza. Talk to the old man to find out that he is actually the Town Chief. He is in charge of giving travelers jobs to do. Since he sees that you don't have any monsters he gives you some supplies and a request to prove your strength. He will give you a job to do once you have beaten all of the low ranking rulers at the Beast Fighting Arena.
Before going to the Beast Fighting Arena you should go to Soulin Fighting Monster, Item Store to hatch the 4 seeds the Town Chief gave you and possibly buy 1-4 additional monsters as well. As long as you take a few monsters to the arena beating the 3 rank E opponents should not be too difficult. Advance to the middle of the arena and call 3 monsters. By next turn they should be summoned. During the battle you should either stay towards where you started and hide behind your monsters or run up beside the other ruler and attack them yourself. Once you have beaten all of the rulers in rank E speak once more with the Town Chief to gain access to Bal's Fortress.