If you try to go back inside North Sparrow Pass with Nanami in your party, she will attempt to do the same thing that Rina had earlier, but to no avail. You have no choice but to go back to the Mercenary Fortress.
Back at the Fort, Viktor and Flik will leave your party and instruct you to find some recruits. You know what that means? Time to start recruiting the Stars of Destiny. Although it isn't mentioned, Gengen has automatically joined your army as well. If you talk to Leona at the counter, you can add Gengen and other party members that will join your cause. Jowy is a required character right now, but don't worry, unlike the original Suikoden, situations like this are few and far between. You can also go downstairs and talk to Barbara to use the warehouse. It's important to store precious items, like the Flint or the vase you got from Riou's house, here so that you have adequate space in your item bag. The warehouse is only available for a short while here, and then you will be without it for a small portion of the game; so make use of it now. The shop is also open, and you should view its contents now, as it is available for a short amount of time as well (Think something bad may happen to this area?).
Huh? A reincarnation of Teo McDohl?? Anyway, let's begin our recruiting. Leave the Fortress and head all the way northwest to the village of Toto.
Inside the Toto inn, talk to the guy in the back to meet Zamza. If Nanami is with you, she will frustrate him enough to join your party. If you don't have Nanami, you will not be able to recruit him until later on in the game. Not much else is going on in Toto at the moment, but it does have your first appraiser and some stores to check out. Like Ryube, the shops here are open only for a limited time, so don't miss them. Now that we have a full party, let's look at the drops on the new enemies that have appeared out on the world map.
BonBon's from the North Sparrow Pass are here now and we can get the antique: Octopus Urn. While you can buy these much, much later in the game from your Castle trader, you will need six of these to view a hidden bath scene in the game; assuming you have recruited the right characters for it, so if you get a few, you may want to stash them in your vault for later.
Shadow Dog's also appear on the world map and drop the fantastic Hazy Rune. This rune increases a character's ability to evade physical attacks; unfortunately, unlike the original Suikoden, the Hazy Rune in Suikoden II acts separately from a normal evade and thus a character cannot counter when it is activated. Still, it is a great rune to consider. Shadow Dog's are your only source of getting Hazy Runes in the game. When you're ready to continue on, head over to Ryube Village.
At the entrance of Ryube you'll see a guy dressed in blue quivering on the ground. Talk to him and ask if he is okay and agree to get him some food. Unfortunately, we'll have to pay his bill of 3000 potch in order for him to join our party, but it's well worth it.
Talk with Millie, who is rushing about back and forth on the northeast side of town. She will ask for help in locating her pet, Bonaparte; agree, and you will go into a small dungeon, Ryube Forest. Your goal is to head to the right side, but you can go ahead and take the left now to pick up some treasure and two new characters, but you will come here later on in the story.
On the left-side path, you will notice a baby bird has fallen from its nest in a tree. Have Riou search it and choose to return the bird to its nest. Leave the screen and after fighting some battles, return, and you should see Kinnison and Shiro standing where you found the displaced bird. Tell him that you were the one that helped the bird and he and Shiro will join your party.
On the right-side path, you will engage in a mini-boss battle with Bonaparte. If you haven't got any equipment from the rare finds and or at low levels, Bonaparte can do some hefty damage, but not too bad. Use Riou and Nanami's Family Attack to wear its HP down. When the battle is won, Millie will join your party. Note that Millie comes equipped with a Blue Ribbon accessory. While of not much value as an accessory, it is one of only five of these in the game. I would recommend going ahead and stashing this one in the vault.
Lastly in Ryube Forest, the Woodpecker enemy (Not the one that you encounter on the world map) will drop the excellent Killer Rune. This rune provides a substantial increase in your character's ability to land a critical hit and thus will be a valuable rune for the entirety of the game. A few characters that join your party will come with one of these attached, but other than those runes, you can only find the Killer Rune in the Ryube Forest. Done in the Forest, return to the Mercenary Fort and round out the party you would like to use with your new recruits and then head back over to Toto Village to resume the story.
If you've recruited all the characters thus far, or taken enough time just wandering around, you should get a scene when entering Toto. Watch the scenes as you are introduced to the little girl, Pilika, and her family that rescued Jowy after the jump into the river. Pilika will ask Riou and Jowy to buy something in Muse for her to give as a gift to her father and give you 70 potch. You can exit across the bridge on the left-side of town to get to the Muse area. You've got a good chunk of the world open to you after crossing the
bridge over into Muse. Muse, itself, is in the center of the area, the
town of Coronet to the south by the lake, two checkpoints to the north,
and to the east, the border leading over to the Greenhill area. In the Greenhill area, you can visit the academy town of Greenhill, and the small Forest Village to the far east; there is also an inaccessible town to the south and a closed border path to the north. You can visit all of these areas if you like, but I won't be covering them until the time comes to venture to them for the story. Be certain that there are no items in these places that are rare for the moment and cannot wait; as well as no characters that can join your party right now. The only things worth noting is there is a blacksmith in Coronet that can sharpen your weapons to lvl 5, and the infamous Matilda border bug that allows you to access the area of Matilda MUCH earlier than you are suppose to. In my opinion, doing this ruins a good portion of the game, and I won't be covering it, but if you'd like to try it out, at the Muse/Matilda border, you can actually push the gate out of the way (Like you did with the crates back at Viktor's Fort) and have access to the Matilda area. Be wary, as the monsters there will likely slaughter your characters and you will need to play carefully.
Back to the Muse area, we have an important drop to cover. In both the Muse and the Greenhill area, you will encounter Sickle enemies. These monsters, and only them, will drop the Gale Rune. This is a missable item as the enemies around Muse will be changing constantly throughout the game. If you want these for character setups later on, you need to farm them now, and store them in your vault at the Mercenary Fort. A character that joins later on in the game will come with one attached, but other than that one, the Sickle enemies at Muse now, are the ONLY place in the game you can get these. The Gale Rune, when attached, greatly increases a character's SPD stat, and thus allows for quicker turns and chances to strike multiple enemies in one normal attack. I, personally, wouldn't go too crazy picking a large amount of these up, as there are plenty of better runes in the game, but it can be useful for certain setups. Another note is, both the Muse and Greenhill area share the same encounters, except the Gold Boar, that only appears in Muse. When you are ready, enter Muse.
For such a huge town, there isn't much going on in Muse at the moment. You can visit your first rune shop here and purchase Fire and Earth Runes, as well as finding Water and Fury Runes in the rare finds. I highly recommend a Water Rune for Nanami and to buy a few Fire and Earth Runes, at least to place in your warehouse, due to the fact we will be unable to buy these again until much later on in the game. As for the Fury Rune, this will be an unpopular opinion but; I don't like it. When attached, it essentially doubles the attack power of a character for the entire battle. While there is no denying this is one the best runes you can give a physical attacking character, I just think it is a bit overkill in an already fairly easy game. I am also turned off by the runes esthetics causing the character to glow a bright red. Also, later in the game, you will be able to acquire the Tinto Specialty food item which heals a large amount of HP and more often than not will grant the character berserk status. Just my preference; feel free to make up your own mind about it. Either way, the Muse rune shop's rare finds is the only place in the game you will find this rune, and it does persist here throughout the entirety of the game.
Continuing the story, head over to the Muse item store to purchase the Amulet for Pilika. When you find out that the item costs much more than the amount of potch Pilika gave you, you can refuse to pay it and Jowy will sell one of his belongings netting you the Wooden Amulet, plus some bonus potch left over. I personally think Riou choosing not to pay for it is poor character choice, but you make the call. Also at the item shop, you may find the Sun Badge in its rare finds. While this accessory is just barely a decent option (+2 HP regen), it is a rare item. You will find one in a chest later on in the game and you can get one from a mini-game, but this is your best place to acquire more. This was all there is to do in Muse, when you are ready, return to Toto Village.
Toto Village has been pillaged and burned by Highland upon your return...While comforting a surviving Pilika, a familiar face in Apple will approach the party. She will ask you to take her to Viktor at the Mercenary Fortress, which will be your next destination.
Reenter Toto and you will find Hanna among the remains. Talk with her and ask her to join your party and she gladly will take up her sword for your cause.
Arriving back at the Fort, take Apple to meet Viktor in the war room. They will prepare to defend the Fort from the Highland forces, but will need Riou and Jowy to seek out a man named Tsai to repair their rusted Fire Spears. He can be found in the mountains of Ryube Forest. Head back over to Ryube Village and into the forest where you recruited Millie earlier and take the left-hand path all the way to Tsai's small cabin.
Inside, Tsai will eventually show up and join your army; you also get to pocket the potch that Flik gave you earlier to recruit him.
When the party reaches Ryube, Luca Blight has unfortunately made it here already. He brutally slaughters the citizens and burns the homes to the ground. If you choose to join with Jowy and attacking Luca, Tsai will step in and knock the two out, knowing they are no match for Luca's inhuman power. With the town destroyed, all that's left is to return to the Mercenary Fortress to prepare.