Your next stop is Dwarven Hollows, it's situated at the very northwest of the Floating Continent.

1. Go to (1) and talk to him to trigger a show. 
2. Go to (2) Suterranean Lake. Again, you will have to cast Toad spell to enter Subterranean Lake then cast again to reverse the effect after reappeared.

Chests (7):

• Gold Needle (x3)
• Zeus's Wrath (x2)
• 3000 Gil (x2)

1. After defeated Gutsco, you can use teleport then re-enter or backtrack to Dwarven Hollows.
2. Go to (1) and talk to this guy again to trigger another scene (Ignore the the shadow following you, its Gutsco).