I'm not leveling up in Dream Carnival

[amanda_littlemonster5@hellokitty.com]

None of my skills are leveling up, I'm still level 1 on everything even though I've done so many quests D: How do I level up?

[✿Herly/Twirly✿]

Nobody actually levels up in Dream Carnival. To level up you have to leave Dream Carnival and go to Sanrio Harbour. The quests in Sanrio Harbour will make you level up. Just leave Dream Carnival when you are ready! Remember, you won't be able to come back once you go to Sanrio Harbour!

[Tacitala]

The Dream Carnival is a special area in the game that allows you to not only get a hang of game mechanics, but to complete both a special collection (about the different Sanrio characters you meet) and to earn some very nice gifts.

However, as it's a special tutorial area, you won't get to keep all of those nice levels. Once you "wake up" (and wash up on the dock of Sanrio Harbour in essentially your underwear) you'll find yourself at level 1. However you will also find a Clothes Constrictor waiting for your well earned Clothes Ticket, which will reward you with some prizes, all of the way up to a pet card for a boss monster (the Dark Starbeam) depending on how well you did.

You can leave the Dream Carnival at any time and move on to Sanrio Harbour, but once you are there, you can never come back.

You're not the first person with questions about the Dream Carnival. :) I'll go copy/paste my answer in the unofficial FAQ