You will be hailed by a familiar sprite once you enter the city. Join the tournament and move though the city. Lab evolution is now possible so grab as many Phone Card (item) as you can and start extractingandcombining.
After you're done or broke of chiru, keep going - the other pathways are blocked so just keep going where you can walk and beat the other T-Fangers you come across[no numbers for taking]. Apparently Nerikara gives the prize, an upgraded D-Shot. Later Musa will upgrade it again.
After debating his motives, return to the city and head out the path that was blocked earlier by a pair of humans. To Barran!
