Take the first left after the Turks in the underground tunnels and you'll immediately run afoul of Shinra's last great technological innovation, a massive robot known as the Proud Clod. Piloted by the twin lunatics Heidegger and Scarlet, proud Clod has its sights set on tromping Cloud and his crew.
Fortunately, this battle isn't as bad as you might think. Though Proud Clod has a lot of attacks to toss at you from its myriad of weapons, none of them do a ton of damage and aren't likely to kill any of your team members unless you're woefully under-equipped. If you managed to beat Diamond WEAPON you shouldn't have much trouble with this monstrosity. Take out its armor first then concentrate all your attacks on the remaining target, its main body. Heal when necessary and use DeBarrier if Proud Clod uses Rainbow Ray on one of your characters, since that will just prevent you from healing.
Once the Proud Clod explodes, taking Heidegger and Scarlet with it, you'll be free to roam the streets of Midgar's upper quarters. You don't have much choice in your destination, however, so head to a save point, put Barret in your party and make a beeline for the Sister Ray.
Why Barret? Well, he's not necessary for this part, and if you don't like him much you can swap him out. The staircase path up to the machine has his ultimate weapon, however, and it won't appear unless he's in your party. Once you've snagged the Missing Score you can drop him again and continue as usual.
At the top you'll find Hojo messing with the Sister Ray's controls. He'll reveal that he's Sephiroth's father, and as father he wants to help his son out by directing all the Mako energy he can muster at the Northern Crater, thereby making Sephiroth even more powerful. He then decides to stop the party by showing off his jenova-bestowed powers, having injected himself with the parasite's cells. If Vincent's in the party you'll geta bit of extra dialogue, then the battle begins.
This is a three-part brawl. Hojo begins as his usual self, summoning two of his experiments to help. Ignore them and attack the madman himself with strong physical attacks. Hojo won't take much of a beating before he merges with the creatures, creating an altogether more monstrous being with two target points. If you fear strong attacks you'll want to take out his arm before attacking the body, as it does the most damage. The only other problem will be a few status effects which are easily countered. Do enough damage and Hojo will transform again, into his most dangerous form. This smaller form doesn't hit hard, but it hits often - and will cause numerous status effects to your team. Keep Esuna handy at all times and attack consistently.
Once Hojo goes down the threat from Shinra will officially come to a close, and the path to Sephiroth will be open. You'll endure a lengthy series of character-building conversations wherein you discover that everyone wants to help stop Sephiroth, despite Cloud's doubts. Once you're ready, Cid will change the Highwind into a new, swifter form, and the team will take off for the Northern Cavern - which is found exclusively on the third disc, along with the end of Final Fantasy VII.
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