After having finished off La Cité des Cloches, The Grid, and the Prankster’s Paradise, it seems something else is occuring in Traverse Town. No choice but to go there, anyways, so… By the by, no need to Dive.
Once Sora arrives, he finds it weird that he is back here, as if he didn’t choose this locale. He finds that Joshua has been waiting for him, and Riku is here too. But in the other half.
Anyways, it seems that if Neku’s group wants to return to their world, they need to win the Reapers’ Game - a set of missions - and they need Sora’s and Riku’s help.
Once you regain control, go to the northwestern corner of the area for a Shield Cookie , and just east of the north-central bit to find some Block-it Chocolate . Go to the east-central alcove for a Potion . Go to the south side of the area and you can enter the Garden.
There, go northeast and open the chest for a Royal Cake , and go around the corner from the bottom of the ramp to get some Confetti Candy , then open the chest at the far northern portion of the area for a Drop-Me-Not .
Scale the eastern wall with Flowmotion to get a Rampant Figment . Finally, leave the area and go southeast outside, too.
Here in the Fourth District, scale the northern wall to reach the ledge above the entrance of the Flick Rush thing and you’ll find a special Portal. Win the battle without using the X Button to get 40 DP , a Vibrant Fantasy , and a Royal Cake .
Then make your way west to the purple lit-up area and scale to get on the roof behind the building where you can get a Water Barrel from a chest. Then go south for a bit to the Fountain Plaza. As you head there, go into the alcove northwest of the entranceway to find a Potion chest.
There, you’ll find Neku and Shiki fighting some Nightmares, and not exactly winning until Sora saves them. The fight isn’t exceptionally difficult; not much more so than the other fights around here.
After winning, you’ll get the Sliding Sidewinder . During a quick scene, we find that the Nightmare has gone to Riku’s half of the world.
Once you regain control, head back into the plaza and get atop the the northern fountain with Flowmotion to reach a chest containing Strike Raid . Afterward, head along the linear path southward, back into the Post Office.
Once there, ride the green rail and jump as it turns south to the brown rail and head east to the First District via the elevator. On the way, head into the northeast corner of the area and use the Slingshot to knock down some boxes and get a chest.
Once you arrive, go to the northern part of the area and get on the wooden overhang to find a chest with an Ice Dream Cone . Then head southwest into the alley to find a Potion. Then go southeast to the Third District through the big door.
Note that I think you might be able to reach the Second District. Go there for a Balloon (top of building to the northeast; use Flowmotion to scale), a Hi-Potion (go north to the clock tower), and a Confetti Candy (go east onto a lower level). THEN head to the Third District.
There, it seems Riku did his job and brought the main Nightmare over. And it’s a big boss.
Effective : ???
After that fight, Spellican flees yet again, leaving Traverse Town for now. Sora decides to go after it and then seals a Sleeping Keyhole, gaining the Knockout Punch Keyblade in the process.