In order to level up your characters you need to compete in dance battles. If you win a dance battle then you will win more XP for your characters, but if you do not win you will still be awarded XP for your characters. Leveling up your dancers will make them more powerful in battles. If a dancer has leveled up, then you will be able to score more points in the next battle with that dancer. Dancers at a high level will score more points during the battle.
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