The Up arrow
In one of the dungeons in Hook tail's castle, there is a crock in the wall. Use Bobbery to blow the wall up. Inside is a chest. The chest contains an Up Arrow. When you go back to Rougeport, the wizard guy that gives your partners better attacks is outside of his house. Talk to him and eventually he will go back in his house. Give him the Up Arrow and he will remember something and fly up to his attic. Then he will come back down with a red sphere-like object. (He says what it is but I don't remember) His blue diomand on his table absorbs it and he tells you that he can upgrade your partners another time if one of your partners have all ready upgraded.