At the character selection screen, highlight Draco (the training character, far left in the front row) and hold Start. Then, player one will be able to choose player two's character and vice versa.
At the character selection screen, highlight Arle (the main girl character, second from left in the front row) and hold Start until Carbunkle appears.
At the character selection screen, highlight Shin (the character to right of Arle) and hold Start until the Satan appears.
At the character selection screen, highlight the elephant (far left in the back row) and hold Start.
At the character selection screen, highlight Lulu (far right in the front row) and hold Start.
