Beat arcade mode with a character afterward L+O at the selection screen.
Play as Excaliber
Successfully complete Adventure mode. Start another Adventure mode session. After winning 49 battles, go to the cave where Excaliber is located. You will see Battle 50 there. Defeat Excaliber five consecutive times to unlock him.
Play as Medusa
Successfully complete Adventure mode as Maka.
Secret Characters
These characters are unlocked after beating arcade mode for the first time: