After defeating the Yo-kai that was causing the typhoon, Hovernyan ask you to help stop a Yo-kai battle in the past.
Um... A Big Battle?
Warp to Harrisville Station, then use Miradox to go to the past. From there, take the train to Old Springdale. Talk to Hovernyan outside of Old Springdale station.
Afterward, go to the right and approach the Yo-kai. Afterward, talk to the Tongus.
Then go northwest in this area and go into the tunnel. After you go through, Smogmella will ask which side you are on. After you choose, she will take you to the base of the army that you chose.
The Big Battle Begins!
Talk to the general. Then go to the Guardian Mirror and talk to the enemy attacking it. Defeat that enemy. Then talk to the General again. Afterward, talk to Smogmella.
A Stone on Flatpoint Plains
Now go to the stones of the opposite color and talk to the Yo-kai in front of each one.
Afterward, try to go to the enemy general, and you will be stopped by a barrier. Check on the nearby Yo-kai who is creating the barrier.
Then approach the Guardian Mirror. The general's right-hand Yo-kai will come help. After that, go up to the Mirror and talk to the Yo-kai in front of it. After you win, check on the Guardian Mirror.
Next, go to the enemy base, saving your game at the Eyepo before you talk to the enemy general.
Persuading the General
Talk to the enemy general and you will have to battle him.
After you win, you find out the real reason why the war started to begin with. And you discover the Yo-kai who is behind it all. This ends the chapter, starting the next chapter, Master Nyada's Trials.