Before we continue on with the story, put Milich in your party and have Viki warp you back to Scarleticia. You probably talked to Ivanov earlier, but now, with Milich defeated, he will join your party. Bring the paint items you have collected so far to him at your castle and he will paint a mural, which when completed, will result in a rare item (More on this later).
Also at Scarleticia, Kasios can be found on the top floor right-side bedroom. Talk to her with Milich in your party and she will join your army. Talk to her in your castle and she will play music tracks from the game for you.
Next, head over to Antei and talk to Qlon near the entrance. He, also, will join your army. His only use is to announce the name of your castle near the dock entrance. When you have recruited these three characters, return to your castle and meet with Mathiu in the war room. Kasumi, a ninja from Rokkaku, is here and will join your party. Also, it seems that Tir's father, Teo, is advancing on your castle. We're coming upon a very important part of the story. When Mathiu suggests a skirmish with Teo, choose that you would rather not fight your father; we need to do some preparation first.
Pahn is about to duel with Teo. A duel he absolutely MUST win or else he will die. Take him to Scarleticia and boost his levels as much as you can; as well as sharpening his weapon to lvl 12 back in Teien. In the above screenshot is what my Pahn was equipped with at this point. Just to be safe, you might prefer to buy him a Guard Ring instead of an Emblem and the same if you do not have a Mangosh. When you are ready, make sure to save your game, and speak with Mathiu.
Your army will be slaughtered by Teo's armored cavalry and Pahn will stay behind to protect Tir's escape...Teo has crazy attack power and you need to be very careful with your attack selection. Just a few hits from Teo and it is over for Pahn. Hopefully you saved your game and just do the best you can and reset and try the duel again should Pahn lose. If Pahn dies, you will be unable to recruit all 108 Stars of Destiny. When the battle is over, have Tir go to his room in the castle and sleep, then watch the scenes with Leknaat. In the morning, talk to Flik in the war room and he will suggest the Fire Spears that you delivered the plans to in Sarady way back in the beginning of the game. Put Tai Ho in your party (He is required) and go out to the docks. Gen and Kamandol will have upgraded your boat which will allow you to travel to Kirov; it is located north of the Pirate's Fortress.
We've got some recruiting to do in Kirov before we head off toward the Secret Factory. First, stop by the inn and talk to Georges at the table. If you can beat one of his records at his mini-game, he will join your army. This is a highly frustrating game on later difficulties, but shouldn't present too much of a problem to beat his record on the first level (It's a game that is similar to the child's game "Memory" you may have played before.) Once you beat one of his records, he will head off to your castle where you can play this game again anytime by talking to him. Note, that there are no rewards for beating his records, even on the highest difficulty.
Lester, the chef, is next. There are two houses between Sarah (The lady washing clothes we will meet in a moment). Go inside the houses and have Tir search the stoves to taste the stews inside. Next, visit the mansion near where the party's boat is docked, and you will find Lester inside now. He is pleased you have sampled his stews and will join your army.
For Sarah to join us, we have to play a little game of trading items. This is also important for those, like myself, that like to have as many rare items as you can in your vault. The first thing we need to do is buy some Sugar from the item shop. Now, talk to the guy near the armor shop who says he needs some Soy Sauce. Second, talk with the guy that is below the inn area who wants Salt. Third, there is someone in the lower-right hand corner of the town near the lake that wants a Yardstick. Lastly, talk to the guy in the right-hand-side room of the inn who will take the Sugar from you and give you the Yardstick.
Now, if you wish to keep these one-of-a-kind trade items, after you receive each item (Except Soap and Sugar), return to your castle and place them in your vault. You can start the trade process again and keep the items in your vault. Trade the items around to the right person until you get the Soap which Sarah requested. She will join your party and you get to keep the Soap.
Out on the world map, we only have one rare item here that is held by the Siren enemy. It is the Prosperity Rune, which you may have gotten at the beginning of the game in Sarady if you choose it over the Fortune Rune (Interestingly enough, the Fortune Rune is now for sale back in Kirov). This rune increases the amount of bits you receive after battle and besides in Sarady earlier, this is the only way to acquire one.
Inside the war-devastated town of Kaleeka, to the far-right of the exit, is a house with the Sound Crystal inside. This is used to recruit a character that we will in just a bit...
Before exiting, talk to Blackman, without having stepped on his plants, and he will join your party. If you stepped on them, simply exit and reenter, and talk to him again.
While in Kaleeka, the Hawk Man enemies carry two unique antiques: Wide and Black Urns. These two can only be gotten here. Before heading on to the Secret Factory, you should be able to get Tir to level 40 and that will allow us to get a few more recruits.
Stop back in Kirov and talk to Melodyne near the docks. With the Sound Crystal you found in Kaleeka, she will join your party. At your castle, take her any Sound Sets you have gotten or get in the future and she will change your menu cursor sound. Note, that because of a bug, sometimes when you load your game, the sound will revert back to the default one.
If you've been using Kirkis, and he is at least level 35, drop back by the inn in the Kobold Village and Rubi will join your party if Kirkis is accompanying Tir and meets the level requirement.
Lastly, warp back to Teien and speak with Eikei on the docks. If Tir is level 40, he will join your army. There is something unique about Eikei as well...
Eikei comes with a Double-beat Rune attached to him and it is removable. This is an outstanding rune that should be put to use on one of your front-line characters. It allows a character to attack two enemies in one turn. Unfortunately, for whatever reason, only rarely will a character attack a single enemy twice; it does happen though. It may have to do with a character's SKL stat. I usually use Double-beat on Viktor up until I acquire the character Griffith later in the game and I attach it to him. Viktor will almost never attack a single enemy twice, while Griffith seems to do it much more frequently. Perhaps the LUK stat plays a role as well? Either way, this is an amazing rune and it is the only one in the game.
Now we are ready to go to the Secret Factory north of Kaleeka. Inside, a large woman is harassing old friends Kessler and Ledon. After the scene, talk with them and they will join your party.
In the back of the factory, Kage is hanging out. Speak with him and pay his fee of 20,000 bits and he will join your party as well. Afterward, talk with Mose here about the Fire Spears and return to Kirov. Inside the mansion where you recruited Lester; talk with Kun To about borrowing some boats. He will join your army, followed by Mose and Ronnie too. Now we are ready to face-off with Teo. Return to the castle and talk with Mathiu in the war room.
All you need to do here is Charge and you will annihilate Teo's armored cavalry with your Fire Spears. Use the Strategist option under "others" to boost your attack power.
Teo is not going to surrender though...Tir will have to duel with his own father. Teo is much weaker than he was against Pahn and has half health; so Tir should have no problem defeating him. Unfortunately, the battle and the duel were too much for Teo and he passes away in Tir's arms. He leaves his attendants, Alen and Grenseal to join your army (Whom come with Rage and Thunder runes respectively; non-removable, though). This brings a close to this chapter.