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Various places throughout the World of the Ocean King
Upgrading the Spirit of Courage
Courage Gems are items in Phantom Hourglass. There are 20 gems to be found in the game. After collecting 10 of them, the Spirit of Courage's strength will increase. If Link collects 20 of them, it will max out her strength. Once Link reaches the 10 and 20 marks, he can head over to the Spirit Island spring and upgrade the spirit fairies.