In this part of the game you need to get into Don Corneo’s mansion, by getting Cloud to dress up as a woman :). Firstly, go to the right to the Honey Bee Inn. Talk to the grey haired guy outside and choose the first option. Go all the way north to Don Corneo’s mansion. Talk to the guy outside. Go back to the first screen and enter the clothing shop in the top left, and talk to the woman behind the counter. Go to the second screen and enter the bar on the left (where the ‘IN’ mat is). Talk to the man sitting on his own at the right side of the bar. To get the best dress, pick the two bottom options ‘that feels soft’ and ‘that shimmers’. Go back to the clothing store and see what dress you got, if you picked both bottom ones you’ll get the Silk Dress; if you chose second, then first option, you’ll have got the Satin Dress, and if you picked first choice then either first or second choice, you’ll get the worst dress, the Cotton Dress. Now got to the gym on the right of the second screen. Talk to the person here. Here, you’ll have to do squats to compete for the wig. Don’t push the buttons too fast or Cloud will get confused and won’t be able to keep up. I suggest you practice first. Depending on how many squats you did, depends on what wig you get. If you do more squats than the other guy, you get the Blonde Wig. If you get the same, you’ll get a worse wig, and you’ll get an even worse one of you get less than him. I’m not sure what wig as I’ve always beaten him and gotten the Blonde Wig.
You can now return to the clothing store and change into the clothes and go to Don Corneo’s mansion, but you can also get other items to make Cloud more feminine. If you want the Don to pick Cloud you’ll need to get the best of the other items, I’ll tell you how to get the best ones here:
When you’re done, go back to the clothing shop, get changed and return to Don Corneo’s mansion in the far north. Talk to the guy outside and he will let you inside. After talking the guy here, go up the stairs and to the left and down into the basement. Meet and talk to Tifa, then pick up the Ether in the corner by the fire. Go back upstairs and go through the middle room to meet the Don. He will pick either Cloud, Tifa or Aeris. If you got all the best items (the Silk Dress, the Blonde Wig, the Diamond Tiara, the Sexy Cologne and either the Bikini Pants or the Lingerie), he will pick Cloud. He will pick Aeris, if you are wearing the Silk Dress, the Blonde Wig, the Lingerie and the Sexy Cologne. He’ll pick Tifa in you are wearing the Silk Dress, the Blonde Wig and any worse items than the ones I mentioned above.
If the Don didn’t pick you, and picked either Tifa or Aeris instead, you will find yourself in the room that was closed before (on the right). Talk to the guys here and fight them when you reveal yourself, then pick up the Phoenix Down by the TV. When you’ve fought them all (they’re pretty easy to beat) go outside. If Aeris was picked, Tifa will be waiting outside. If Tifa was picked go down to the basement and rescue Aeris. The go back into the Don’s room and through to the room at the back.
If the Don picked Cloud, you will end up in the bedroom at the back. Look behind the bed for a Hyper and talk to him. Answer his questions however you like and eventually Tifa and Aeris will come in and interrogate the Don. When asked a question, it doesn’t matter how you answer you will still fall to the sewers below.