Following the massive success of Donkey Kong Country and Killer Instinct, Nintendo invested in 25% of Rare, making them Nintendo's first second-party developer outside of Japan.
The team that had worked on the first game decided that simply producing more of the same wouldn't satisfy their fans, but deviating too far would alienate them. The same basic gameplay was kept, but Diddy was given the lead role, with his girlfriend Dixie at his side, as they travelled across all-new worlds and faced all-new enemies.
The ACM graphics technique that had made the original such a runaway success had also been improved, providing for more detailed character models and other graphical effects that were not possible a year earlier.
Story
After defeating King K. Rool and rescuing his banana hoard, Donkey Kong had taken to lazing around on the beach, and ignoring Cranky Kong's ever-present disappointment in his lazy grandson.
One evening, DK didn't return from the beach as usual, so Diddy and Dixie decided to go and find him. In his usual resting spot they found dozens of claw prints and a ransom note from "Kaptain K. Rool". He would only give up Donkey Kong in exchange for DK's precious banana hoard.
Diddy and Dixie refuse to cave in to K. Rool's insane demands, and decide they will rescue Donkey Kong themselves. The follow the trail to a Kremling pirate ship bound for the home of the Kremlings: Crocodile Isle.
Gameplay
Diddy Kong has not changed much since the original game, but Dixie has the ability to glide across short distances by spinning her ponytail. When you have both Kongs, they can pick each other up and throw each other to out-of-reach places on the screen.
Each level not only has bonus stages to find, but every level also has a hidden DK Coin. You need to find them all in order to complete the game with the highest percentage.
Funky Kong still appears to offer flights to previous levels and Cranky Kong gives you advice. New characters include Cranky Kong's wife, Wrinkly Kong, who saves your game and gives you information, and Swanky Kong who has a quiz minigame where you can win prizes. In this game, nearly everything you get from the Kong Family must be bought using Banana Coins, which can be found throughout the levels.