It’s finally time for some back-story behind that stray cat you adopted. Tell the guard at the entrance to Cosmo Canyon that you’re not familiar with the land and he will tell you all about it. Nanaki (Red XIII) will then come down and let you in.
Talk to Nanaki at the top of the stairs on the left and then follow him the rest of the way up. The weapon shop in the next room has upgrades for everyone. A shame that you won’t be earning double AP anymore with these new upgrades, but hey, you can’t win ‘em all. Be sure to grab an upgraded weapon for each of the characters you plan on making a permanent addition to the team. Make your way up to Nanaki’s grandfather’s house once you're finished.
Talk to Nanaki again once you get inside. Bugenhagen, Nanaki's grandfather, will tell you about the cries of the planet and will tell you to invite some friends to watch his ‘apparatus’. Climb down the stairs back into the cave and talk to Cait Sith in the room on the right to continue. Grab two team members and head back up. Walk through the door and talk to Bugenhagen to get started.
After the scene go back down to the bonfire in the center of Cosmo Canyon. The team-members you’ll need to speak to in order to continue with the story are Aeris, then Tifa, then Barrett and then Nanaki. After that you’ll have to create a party with Nanaki and Cloud in it. Go back up to Bugenhagen’s house, and save on the way by.
Talk to Bugenhagen when you reach him on the floor just beneath his house and tell him you’re all set to go. Welcome to the Cave of the Gi; the next mini-dungeon you'll be traveling through.
Cave of the Gi
Make your way down the ladders and ropes into the sealed cave and go through the door on the right. There are a bunch of small holes in the walls that have switches in them in this cave. Pressing the wrong switch will throw you into combat.
Don’t touch the switch in the first hole. Go past it and find the second hole and then go past that one as well. The third hole has the switch you need to press inside it. Go through the newly opened door. Make your way up and to the left, but be careful of the oily looking substance on the ground. Make sure you don’t run while you’re on it or you will slide straight into spikes. Go down and through the doorway in the south wall to grab the Added Effect Materia from the other room.
Go back up to the oily spot and go right. Go north and around to the stairs on your left and grab the two chests on the bottom floor. Then go back up the stairs and go down the top left pathway.
Take doorway [4] (using the map to the right) up to the spider web and touch it to begin the fight. This spiders worst attack is called Sting Bomb, it takes away a percentage of the characters health (something like 70-80%). It can’t actually kill you, but it makes it easy for one of his other attacks to finish you off. Be ready will the heals.
Continue north and grab the chest for an X-Potion. Go back to the doorways and take doorway [2] and kill the spider blocking the way. Then make your way left and back south to grab the chest off to the right. The pathing is a little weird but there’s a secret path that swerves off right that’ll take you to the chest as seen in the picture on the right.
Then go back up and kill the last spider on the web and continue north. Don’t forget to grab the Turbo Ether off to the left hand side. There’s another hidden doorway you have to find in the green colored part of the cave in order to get to it.