I'm aware that Dungeons & Dragons is out of its prime, but from my perspective it appears that the jokes can still be understood by a D&D outsider. I wouldn't know, though. Bear with me.
Chapter 3: D&D
Insectosaurus swooped down onto the mansion and Link jumped in the window. Susan, B.O.B., and Dr. Cockroach were playing poker. "Hey, fellas!" Link called. "Look what Insecto and I got!"
He held up a copy of the Dungeon Master's Guide.
"Oh, D&D!" Dr. Cockroach said excitedly. "Wonderful! Did you ever play D&D, Susan?"
"Oh, Dungeons & Dragons?" Susan said. "No, I never tried. That was more of a guy thing when I was a kid."
"Ah, we used to love D&D," Dr. Cockroach said dreamily. "I was the greatest larva mage in the Realms!"
"It was the best," Link agreed. "When Monger bought us the D&D core rulebooks… man, that broke the monotony of the '70s perfectly. And the '80s. And some of the '90s."
"What happened in the '90s?" Susan asked, catching the "some" bit.
"Oh, well," Dr. Cockroach admitted, "in 1993, we staged a re-enactment of our session…"
"We got a bit carried away," Link picked up the thread. "Some chairs got broken, and some utensils got broken, and, uh, some people got broken…"
"And Monger confiscated all our books and character sheets," B.O.B. finished. "Do you think we could get him to give them back?"
"No, he burned them," Link said. "That's okay, we can start over. Check it out." Link pulled out five miniatures that were built in the shape of the monsters. "Modesto Monsters edition D&D!" Link said proudly. "I sold them the rights to it last week, and they made us the character sheets."
Dr. Cockroach looked at the character sheets. "These are Third Edition!" he said, surprised. "I thought they stopped making these! I searched Amazon for Third Edition books for weeks."
"Well, they originally made it with Fourth Edition," Link said. "They wanted me to come by and have a look at it. I explained to the guy that Fourth Edition blows, and could he pretty-please convert it to Third, and when that didn't work we flew him to Chicago and dangled him over the edge of the Sears Tower until he agreed to bring Third Edition back."
"Excellent work, boys!" Dr. Cockroach said, impressed. "Ah, so they made monsters out of the five of us, for high-level parties to fight."
"That's right," Link said. "Check out Insecto. Colossal vermin, and they have him in grub and butterfly form. He's one of the toughest monsters they've ever come up with."
"So we can create characters, and somewhere down the road, we can fight ourselves?" Dr. Cockroach said. "Oh, that's funny."
"That's right," Link agreed. "Okay, I've worked myself up a dude called Dagon; a half-orc barbarian, chaotic neutral. Insecto is a gnome rogue called Gamble, also chaotic neutral."
"I want to be a sorcerer," Dr. Cockroach mused. "Lawful evil… a diabolical genius! I'll call him… D!"
"D?" Link repeated.
"D! With an exclamation point. I've always wanted to call a character that."
"You go ahead and do that, Doc," Link muttered. "B.O.B., what do you want?"
"I want world peace, a healthy rainforest, and bigger boobs, but let's be freakin' realistic."
"For your character, B.O.B."
"Oh. Um… I'll be a halfling cleric. Lawful neutral. I'll call her… Bunny the Bunny."
Link wrote that down on B.O.B.'s character sheet. "Bunny the Bunny?" he repeated. "Bet you were up all night coming up with that one."
"I've been working on that one for years," B.O.B. said. "Ever since we brought up the subject back in '99, I've just been mulling it over in my cell…"
"So what do I do?" Susan asked.
Link tossed her the Player's Handbook. "Read it, learn it," he said. "Then pick what kind of character you'd like to be."
Susan delicately opened the book. "What do you guys recommend?" she asked.
"Nothing to recommend, my dear," Dr. Cockroach. "Every option has its own advantages, and since the four of us have chosen a diverse group, you can be anything that appeals to you."
Link crawled up onto Susan's shoulder. "You'll notice," he said, "that all of the good and neutral alignments claim to be the best, while all of the evil ones say they're the most dangerous."
"So this is really a game of the imagination," Susan said. "Wow, look at all of this."
"A lot better than a video game," Link confirmed. "Way more detailed."
"Except for Ms. Pac Man," B.O.B. added. "You can do anything with Ms. Pac Man."
"Sure, pal," Link said. "So, just read it cover-to-cover so you can see all the options, then we'll help you generate your character."
"Okay," Susan said. "I'll be in my room."