That quest is AOL Cup Sunset Base in episode 1. This only works in hard, very hard and ultimate modes of difficulty. You'll have to be the mediator between two rappies at some point, but I'll let you guess how to encourage them. ^^
I like the choices in your wish list Yutsu, they're good-looking items. ^^
I wish I had a PoM. I can hand over my Sorcerer's Cane and my Cat Ears if you like. XD
Oh I though it was originally only to be found as a prize from BPD2 in Ultimate, but here it's been removed. Which ep2 quest was it? Here it's not available outside of the xmas event. u.u
Rather look for offensive techs at least level 26 since this is where they get their max range and speed. Higher than that is just for a bit more power.
I believe you should hunt the disks yourself in Seabed or Towers.
As for DB, if mine wasn't a gift I would certainly trade it for this Excalibur!