Enemy listEnemies
Chest listChests
Hidden itemsItems
Smash through the boulder west of Kazus. The airship won't survive the impact; it crashes into the mountainside and explodes. You'll walk the rest of the way to Canaan on foot, and three new bestiary entries spawn along the path. Bugbears hit the hardest at 20 ATK, and Mandrakes are sturdier with 120 HP. Register all three for the Field Research - Professional trophy:
Canaan
Cid leaves your party when you enter town. Hit the shops before exploring. The armor shop is identical to Kazus. The weapon shop carries the same Mythril gear plus a Great Bow (900 Gil) and Iron Arrow (400 Gil), though you'll find both in Cid's hangar for free. But the magic shop has new level 2 spells. Thunder (700 Gil) is the big purchase; it's the strongest offensive spell you have right now, and several upcoming bosses are weak to lightning. Poison (700 Gil) deals damage over time and stacks well on longer fights. Blind (700 Gil) reduces enemy accuracy but most bosses resist it, so save the Gil unless you have plenty.
From the entrance, head into the building on the left. The room with two beds has a bookshelf; walk to the left of it and you'll find a hidden path leading to a Gold Needle (12/61). Check the pot next to the fireplace for the second hidden item, a Mallet (13/61).

Walk northeast toward the magic shop. Above it you'll spot stairs going down into the water. Follow the path through the waterfall (it deals 1 HP to each party member) and continue to a small patch of land at the southeast edge of town. Pick up the Elixir (14/61) but don't use it on yourself.

Head to the northwest corner of town to find Cid's house. His wife is bedridden. Give her the Elixir and she'll recover.

Talk to Cid afterward and he'll step aside. Flick the candle behind where he was standing to open a passage to his old airship hangar.

The hangar has 8 chests on the main floor: Potion, Great Bow, 2 Gnomish Bread, Iron Arrow, Blind, Gold Needle, and Phoenix Down (43-50/367). Equip the Great Bow on a back-row Warrior or Ranger for ranged damage. Head down the stairs on the left and walk through a hidden wall at the bottom for 4 more chests: Potion, Hi-Potion, Gold Needle, and Phoenix Down (51-54/367). That's all 12 chests and 3 hidden items in Canaan.
Dragon's Peak
Exit Canaan and walk south to the mountain entrance. Dragon's Peak has 3 chests and 4 new bestiary entries. Every enemy here is a flying type, and all of them are weak to Aero. Rust Birds are the rare spawn; they drop Phoenix Downs and can be stolen from later once you unlock the Thief job. Keep this spot in mind:
The first section is linear. When you hit a fork, take the long stairs going down for a Gold Needle (55/367). Back at the fork, continue north to a second split. Go north for Aero (56/367), a level 2 White Magic spell that finally gives your White Mage real offensive power. It won't have many charges yet, but it tears through every flying enemy on this mountain. Head west at the fork for the last Gold Needle (57/367), then climb the stairs to the peak.
Dragon's Aerie
At the top, look for a rustling patch of hay on the left side of the nest. Interact with it to find Desch. Bahamut attacks immediately after.

You can't win this fight. Megaflare wipes your entire party in one hit, and there's no strategy that changes that. Select Flee on your first turn and don't look back.
After escaping, Desch joins your party as a guest and hands you the Mini spell. You'll both jump off the mountain and land on a peninsula south of Canaan.
From the peninsula, head south to Tozus. Make sure Mini is equipped on someone before you go; you'll need it to enter the village.