You're now in Nene's flying fortress. Zola joined your team, so take a while to customize her the way you like. Go down the stairs. There's a chest with Iridescent Wind. Follow the dark path north, and at the end you'll see a spell Lv4 - Shadowa. Get back to the main hall. The elevator doesn't work, so you have to go through the door to the east. Defeat the Hover Patrollers and take an Elevator Key from a chest. Also, there's a chest with Lv 4 - Trapflora here. Get back to the elevator and use it.
After leaving the elevator head north-east until you see a chest with Phoenix Wing. Get back near the elevator and open the door to find 1000 Gold. Now go south. When you see a blue laser that blocks your way, go through the door to the left. At the end of the path there's a big group of droids. Turn left to get a Flawless Emerald. Go through the door and up ahead until you see a computer. Head back. The blue laser isn't active now so you can go through. Behind the door there's a Jibral Bracelet. Get to the end of this corridor and defeat the enemies there. There's a Grand Amethyst in a chest here. Look around for some more items. Get through a corridor to the east to reach the first boss.
Boss - Silent Ku
It's best to attack this droid using elemental magic: fire and water. Physical attacks don't do much against him. Notice that whenever he enters Gunman Mode, he gains the ability to counter your attacks very effectively. If you want to avoid losing lots of HP, don't attack him during that time.
Get through the southern door to get an Ancient Feather. Now head east and turn off another engine. The next blue laser has been deactivated, so follow the newly opened passage.
Boss - Turbulent Mai
This droid has two special techniques: Turbulence (messes up your formation) and Anticipate (works similar to Gunman Mode of Silent Ku). The key to victory is, once again, black magic.
Another engine can be turned off to the south. Go back to the junction and go ahead. Defeat two groups of droids that guard the door and take The Way of the Thief from the chest, as well as a Supermetal Earring. A little big further you'll see a room with three chests in it (Shadow Crystal, Mega Magical Medicine, Ultra Medicine), a save point and a regeneration machine. Use the latter. Head through the next door. You'll see a group of monsters behind it (Double Axe - this guy has a lot of HP!). It's not worth it to use items in this battle - afterwards just go back to the healing machine. Turn off another engine and turn back to meet the next boss.
Boss - Heat-Wave Sai
This battle is generally very similar to the previous ones. Whenever the enemy holds a bomb in his hand, try to target it (Jiro will suggest it after a few rounds). This way you'll deal more damage to the enemy.
After the battle once more use the healing machine and head back. Go through the newly opened passage (near the room where you found Supermetal Earring). In the next corridor turn right and take Grand Light Crystal from a chest. There's a passage to the next level just across the corridor. Before you go there, reach the end of the corridor to find a Iridescent Cyclone and a Supermetal Necklace. Get back to the door. You'll find a Warp Device there.
After using the warp device, go downstairs and use the save point. You will now face the final droid of the four.
Boss - Raging Kesu
Just the same thing once more, basically. This witch casts negative status spells on your party, and can deal damage to all the characters at once. Fire, water and wind magic will grant you success here.
Approach the mechanism. After a few scenes you'll be separated from Zola. Stand on the left warp device. Go further ahead to reach the final boss fight of this episode.
Boss - Szabo
The general will summon some minor droids to help him - get rid of them in the first place. The idea of battling Szabo is essentially the same as the droids you've beaten before. He's just a little more resistant to damage.
After the battle enter the mechat.
A little mini-game stands before you. If you complete it perfectly, you'll unlock an Achievement (don't count you'll do it first time through - no waaay). "Perfectly" means "without taking any damage", to be exact. It's not easy, as the gun you control isn't too precise at all, and gets overheated quite quickly. The rule is simple: use the gun to shoot down enemy rockets, and use the rockets to shoot down the enemy. Your goal is, obviously, to bring down Nene.
When the battle is over you will take control of your characters back in the castle. Talk to Manager to get a discount coupon. Also talk to the king and Zola to finally finish the first disc.