ITEMS IN THIS AREA: Phoenix materia.
(Remember, you can do this before or after the North Corel Huge Materia quest; it's your choice).
Pop into the Highwind and fly back to the blue tower with the big gold bird on it (read section 1.12 if you don't remember where it was). Enter it, and climb to the top of the tower. Talk to the man in the room with the locked door. Choose the middle option, and you'll get to control another mini-battle. For instructions/strategies, please refer to the 'Having Fun' bit in section 5.6.
When you win, you can open the sealed door. On the rooftop is a red materia (Phoenix), and if you talk to the man in white wearing the large hat in the lower room, you get a Huge Materia. For a condor's baby, that bird sure looks like a Chocobo if you ask me....
If you fail the mini-battle, you're kicked out of Fort Condor and can _never return_. You can't get the Huge Materia or the Phoenix materia, either.
Head back to the village on the Southern Continent where you left Tifa and Cloud behind (Mideel). When you talk to Tifa, the screen will start to shake. Go outside, and you'll be attacked by a huge black dragon, the second of four Weapons.
__________________________________________________
BOSS TIPS: ULTIMATE WEAPON LV: ?? HP: 10000 MP:400
This boss has only three attacks, Quake 2, the Ultima Beam, and a claw swipe. He's pretty easy to beat, so just keep summoning your best monsters and use physical attacks to deal out damage. After you've injured it enough or it runs out of MP (use Magic Hammer on it), it will fly away. You can absorb Ultima Beam attacks by equipping the Elemental materia plus any non-element materia, like Transform, Exit, etc.
__________________________________________________
The next scene with Tifa and Cloud is so funny! They're puffy and superdeformed, and well let's just say any sense of danger or surprise at this sudden attack is forgotten once you see their wide-eyed faces as they escape the crumbling village.
After Tifa and Cloud take a dive, you'll find yourself playing with Tifa, who's in a strange world filled with Cloud's memories. First, talk to the northmost Cloud. You'll head into his memories of the trip he took to that one town near the Jenova plant with Sephiroth. When Cloud shows up, speak to him again. When you reach the 'center' of Cloud's mind again, speak to the Cloud on the left. Once you're in control of Tifa, converse with the Cloud sitting on the steps to the right (near the 'kid' Cloud).
Then talk to the 'kid' Cloud and look in the window. When you can move Tifa, talk to the 'shadow' Cloud. Once you're back in Cloud's mind talk to the 'real' Cloud and go back to the town area again. Everything else unfolds by itself (you can go to the Main Menu during the burning of Nibelheim--again!) At the end, speak with Cloud one last time, and you'll return to the 'real' world.