Dungeon #2 is easier to get to than Dungeon #1.
1. In Port Town face the lake at the docks.
2. Travel to the Right over the mountains
3. Once you get to the top of the mountain travel along the right side of the Lake.
4. While traveling keep an Eye out on the right of the screen for a blue and a red portal.
5. Climb down the mountain to them the red portal leads to Dungeon #2 while the blue one brings you out of Dungeon #2.
-Raz88