When you appear back in town, you'll be confronted by Cylinder. He wants to know where you got your drill. It turns out that he's good with machines and is willing to help you. If Parin will date him, he'll offer his assistance for free! This is the point where Parin works against your convenience and says that she'll pay instead. Dang that girl and her sense of self-respect!
As Cylinder walks away, follow him and talk to him again. He'll mention that Fan was screaming and throwing knives. It might sound like a reasonable reaction, but this is an RPG and that's a hint. Also, he'll offer you the chance to buy some goodies. If you've been following the guide to this point, you should have somewhere close to 1300 coins. Here's a list of his wares:
||Allows you to use Forward Slash attack.
||Allows you to use the Drill Tornado attack.
||Temporarily protects drill energy.
||Restores lost drill energy.
I went with the STORM PARTS
item because it was the most expensive of the items that sounded permanent. That's always a good investment in an RPG or Adventure game, right? If you do the same thing I did, you'll be taken to a little tutorial screen that tells you how to execute the 'Drill Tornado' attack: you rotate the analogue stick in a circle (or move your fingers across the D-pad in that general direction) and then press the 'X' button to manage a powerful attack that'll surely make enemies think twice before attacking.
Anyway, you should head to the bakery after your shopping spree. Outside, you might notice Poco hiding under a tree. He was scared and figured he'd be safe in town, where humans can't see him and the Phantoms won't theoretically come. Head inside the bakery itself after talking to Poco and Fan will tell you that a cake she had baked and was planning to sell disappeared right before her eyes (was it a monster?). She has to jack up her prices now. Then you have the opportunity to buy goodies. Here's her inventory:
||A star-shaped cookie. (Restores 15HP)
||Gourmet chocolate. (Restores 50HP)
||With strawberries & cream. (Restores HP)
Those prices are pretty hard to hack, especially after the drill upgrade you bought just a moment ago. What were you thinking? But seriously, you should be fine. You still ought to have that cookie in your inventory, since the last dungeon didn't have much of anything resembling a challenge, so for now you can do without pastries. Go ahead and leave the bakery and head to Disk's Junk Shop.
Inside the shop, talk to Disk. He'll explain that he can upgrade your equipment with the Junk you salvage from the corpses of Phantoms you slay. He may or may not say anything beyond that, but if you talk to him thereafter, he'll typically offer his wares. Here's the list, just for reference (though you likely can't afford anything just yet):
||Filters out poisonous gasses.
LV.1 Effect: Gas Damage Halved
||Complete with whiskers. Improves hearing.
LV.1 Effect: # of Chests
||Reduces trap damage. …For some reason.
LV.1 Effect: Trap Damage Halved
||Perform a criticl on an enemy and…
LV.1 Effect: Critical Attacks Restore HP
Once you leave the shop, continue along the walkway toward the edge of town, off to the shop's right. There you'll find Puku, who also managed to survive the raid on the Monster Village. That leaves only Pino to find. Puku asks you to do so and then heads back to the village. Realistically, there's only one place left to search: Parin's bedroom.
Head back to your house and you'll find Pino upstairs in precisely that spot. After you talk to her, she'll head back to the village. Head back outside and now it's time to go through the little hole in the wall to return to the Monster Village.
When you get back, everyone is happy to see you, even if their village is completely destroyed. They're concerned about Dark Mist, the horrible cloud that covers the land. It's apparently a reflection of everyone's hearts, and is causing the world to lose stability. The only way to stabilize things is to return the monsters' friends to the village and rebuild it. Parin is the only one who can truly do it, the village's only hope!
Puku explains that you can only access areas that aren't covered by mist on the world map. Go ahead and exit to the world map. From the village, you have four options: Radish Woods on the trail to the west, Mole Dojo if you head due east and two areas in Potato Shrine. For now, head west to Radish Woods.
NEXT: Radish Woods: Cheery Forest Path