After using the explosives in Duncan's Factory to clear the train tracks, you can continue to the next town.

Go to Snowman

Use an ATM to withdraw at least $72. Then go northeast from Merrysville to reach the train tracks. Follow the tracks until you find Union Station. Go inside and go to the right. Talk to the guy there and buy tickets to Reindeer ($32).

When the train ride is over, talk to the old woman and say Yes to her question. She will give you a hat that belongs to a girl in Snowman. She asks you to give it back to the girl.

Stay in the train station and talk to the man to buy tickets to Snowman ($40).

When you arrive, leave the train station. Go south from there and follow the winding path, being careful of the stronger enemies you can encounter here. Keep going east until you see trees. Look for a gap in the trees where you can go north. Avoid talking to people here, because many of them have a cold, and if they cough on you, you will catch a cold. If you catch a cold, go into the Snowman store (the leftmost building near the "JACK" sign in the south part of town) and buy Mouthwash. Use it to cure a cold. Explore the town if you wish.

If you use the phone in the Healer's house in Snowman, your father will ask you for the player's name. You can enter your full name, or your first name, or some fake name, or a nickname, or some famous person's name, or whatever you prefer.

When you are ready, go to the southeastern house and go east from there, and follow the path to reach the Snowman Chateau.

In the Chateau, talk to the girl, then use the Hat on her. Say Yes when she asks your name. After the cutscene, talk to Ana's dad to heal up.

Ana starts at level 1, so you should take some time to battle enemies so she can earn EXP and level up. Magicant is a good place to do this, so consider using the Onyx Hook to go there. Leave the fenced-in residential area, then go west, then southwest when you can. Look for a break in the trees (near the monkey), and go northwest there. When you find a cat swimming in the clouds, have Ana use Telepathy on it to get a Magic Ribbon. Give Ana the Ribbon and have her Use it to raise her Force by 5 or 6 points. While in Magicant, buy a Magic Coin, Gold Ring, and H2O Pendant for her.