Road to Ruli City
After the scene, walk forward. There will be another short scene. Walk forward again and a boss fight will start.
Boss: Forest Beast
This White Tiger is an easy boss. This is a tutorial for the Chain Attack when you and your ally's attacks get extra damage bonuses if they come in sequence. Distract the boss while Yurick rescues the kids. The boss basically only has two attacks, a rush forward and a paw swipe. Both are easy to block/sidestep/guard. Once the tiger's HP gets low he will run away.
There will be another couple scenes including a flashback.
After that, you can walk forward and take the left path for a save point, then double back and take the right path. There are several townspeople to talk to along the path. As you approach the top, there will be a cut-scene.
Next: Chapter 3