Red XIII, whose real name is Nanaki, grew up under the care of his "grandfather," Bugenhaugen.  When you find him, he is one of Shin-Ra's experimental subjects, and they think of him as nothing more than another animal.  In reality, he is the last survivor of his species, and incredibly intelligent.  His race in long-lived, and although Red is listed at 48, he in the equivalent of a 16-year old in human terms.  His parents were the protectors of Cosmo Canyon, and it is Nanaki's destiny to take over this task. 

Red XIII is a fairly powerful character.  His Cosmo Memory limit break can do massive damage, and it looks neat too ... thermonuclear strike, anyone?  Also Limited Moon, his best weapon, does a lot of damage if you pump Red's MP up with MP Plus Materia.  You can do quite a bit of damage with him early in the game, since he can be at a relatively high level at the outset, depending on cloud's level when you find him.   You get Red XIII while you are trying to break Aeris out of the Shin-Ra building.   

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