You can gain levels by battling. Depending on the enemy you fight, you can get more experience. Upon reaching a certain amount of experience, your pet gains a level. You will be given a certain amount of points to change your stats. For example:
If your stats are STR- 2, INT- 2, AGI- 2, END- 2, MAG- 2 and you get a level, you'll get points to raise those stats. Let's say you're given 5 points. Now, you can take these points and add them to your current stats to make them higher, you can even subract points from other sections to give yourself more points to add to the different sections. In the end, you might have STR- 1, INT- 4, AGI- 3, END- 3, MAG- 4. You took one point away from STR, you get 6 points to spread amoung the rest now, increasing certain sections more that others.

You can also gain EXP from Training. On the Message Boards, in a section called The Pit, you can create a thread in which you train your monsters. When you're done, an administrator will tell you how much EXP you gain. If you gain more than 15 EXP you will be given 1 point to add to your monster's stats. Do whatever you want to train your pet. It's like a little story just between you and your pet, just don't make your training session extremely long.

Along with EXP from battles, you will earn extra Gil. This Gil can be used to purchase more monsters for you.

An interesting fact. Monsters that start off weak, will get stronger much quicker than monsters who start off strong. For example, when a Slime levels up, it may get 6 points to help bring up its stats while a Behemoth, will only get 3.

If you have any questions or comments on The Pit, be sure to e-mail Claw. More sections will be added to The Pit at a later time.