From the rulebook page 18: "Once a hero steps onto the portal map piece, he is removed from the board and becomes invulnerable to harm. Heroes remain thusly
in transit until all of them either enter the portal or move to town, at which point all of the heroes are moved to the next level."

(1) OK, so when the last hero on the dungeon board enters the portal or moves to town, everyone gets moved to the next level, right? Even those who were in town, correct? That seems to be RAW from the above quote, but I wanted to double-check.

(2) Assuming the answer to (1) is yes, If the last hero on the dungeon board moves to town, does he get to do anything in town before he is moved to the next level?

(1) Yes.

(2) No, the next level is set-up immediately.

Thanks, Parathion.

Just to be clear on something related: if all of the heroes are not on the dungeon board because they all went to town, does the next level get set up? Or does that only happen when at least one of them has entered the portal?

At least one hero has to enter the portal to go to the next level.

James McMurray said:

Thank you, James.