Have Dagger give orders:
As Steiner and Beatrix, you must defeat a Mistodon in the Square. Head down to the next screen where you'll fight another Mistodon. Head down once more into another fight. Head right where you must fight 4 Mistodon battles in a row.
Once you control Dagger, head all the way upstairs.
|Items:||Angel Earrings, Ether|