This is another pretty easy dungeon. Follow the map if you need it, get all the treasure, and then approach treasure T6 on the third floor.
Examining this treasure chest will prompt a boss battle.
Have Blont, Bruce and Linn attack, and have Mazenda use Fire. Have Temi Cure anyone who needs it; otherwise she can attack as well.
Red Demon is not incredibly strong, but this battle will take a little while.
When it's over, you get treasure T6 - the Village Key.
Now, exit the dungeon and warp to the Small Village. Go to the prison and unlock the door to get Tink to join your party!
Now, your next destination is the Empire, which is southeast of the Traveler's Fort.