|Animal Buddies||Enguarde, Clapper|
|Enemies encountered||Click-Clack, Flotsam, Kaboing, Klampon, Klobber, Lockjaw, Neek, Puftup|
|Game||Donkey Kong Country 2: Diddy's Kong Quest|
Lava Lagoon is done is similar fashion to Lockjaw's Locker. Dixie Kong and Diddy Kong must swim through another ship wreck's interior; however, instead of the Gangplank Galleon it is one of the abandoned, lava-sunken ships in the Crocodile Cauldron. As such, it starts with regular water overflowing, though it will turn into lava. Lava, typically, is not safe to come in contact with.
To combat the rising lava, Clapper the Seal is introduced. This animal buddy will cool off any lava nearby when he's jumped on. He is needed often because the water will always go back to lava after a little while. Enguarde the Swordfish also appears in this level, in a hidden location. He can use his bill stab to deal with the enemies faced underwater, which include Flotsam, Lockjaw, and a brand new enemy called Puftup. Puftup expand their bodies randomly, and are spiky. On the brief walking segments, there are basic enemies such as Klampon and Click-Clack.
Like Lockjaw's Locker, there are also some areas where Diddy/Dixie can swim through what appear to be solid areas of the wreck. For example, after the Checkpoint barrel, going through the area to the bottom right leads to Enguarde. Going directly up above the first Lockjaw of the trio just ahead of Enguarde will reveal an area where some Banana Coins and the letter "N" is. Finally, after the "G", where a Clapper is, to the bottom right area of the Clapper is lies another hidden area. Going right then up will reveal the DK Coin.
- Click-Clack: 3
- Flotsam: 13 (4 more in bonus)
- Kaboing: 1
- Klampon: 5
- Klobber: 1
- Lockjaw: 5
- Neek: 1
- Puftup: 8 (6 more in bonus)
 Animal Buddies
- Clapper the Seal: Found in various places near lava; jump on him to cool the lava and make it swimmable.
- Enguarde the Swordfish: In a hidden area; after the checkpoint barrel, in the water area, bottom right. Also in the bonus room.
- K-O-N-G Letters:
- K: Found in the bottom left corner after the third Clapper.
- O: Above a Lockjaw.
- N: High up in the area with three Lockjaws. Also in a secret area reached by going up where the first Lockjaw is.
- G: After the Puftup, in a bottom right corner.
- Banana Coin: 7
- Extra Life Balloon: 1 (Red) After getting past the No Animal Sign.
- No Animal Sign: 2
The Star Barrel.