Instructions
Obtain Veemon by completing his DRI Agent Quest. The DRI Agent with the Veemon quest is loacted in Protocol Ruins. Your Digimon's combined level must be 30 or below to accept this quest, which involves defeating Paildramon. Follow DRI Agent Bob's instructions to complete the quest and get Veemon.
Level Veemon up until he can Digivolve into ExVeemon, which he can do at Level 5. Once he digivolves, level ExVeemon up to Level 20. Level up by battling other Digimon throughout the game.
Have one of your starter Digimon Digivolve into Stingmon. All of the starter Digimon have the ability to become Stingmon. Agumon must Digivolve into WarGreymon, then become Level 20; Patamon must Digivolve into MagnaAngemon, then become Level 20; Guilmon must Digivolve into Growlmon then reach level 30; Renamon must become Kyubimon then reach Level 20; Kotemon must become GuardiAngemon then reach Level 10; Bearmon has to Digivolve into Marsmon, then reach Level 30; and Monmon must Digivolve into MetalGreymon, then become Level 30.
Cause a starter Digimon to create Paildramon, then have it Digivolve into Stingmon. Send Stingmon into battles to gain experience until he reaches Level 5.
Go into any battle with ExVeemon and Stingmon in your party. When it is your turn to select an action, pick "Tag" from the list. This brings up the list of Digimon in your party. Pick whichever Digimon is not in battle at the moment. For example, if ExVeemon was out at the beginning of the battle, pick Stingmon from the list.
Look at the window that appears when you select the other Digimon. You can either pick "Switch" or "DNA DV" from the list. Pick the latter and watch the animation as the two Digimon DNA Digivolve into Paildramon.