In Dungeon Quest, there are currently a total of five difficulties, each with a different Level requirement. When you upscale the difficulty you shall be rewarded with better and stronger items, as well as more gold and experience. Needless to say, the higher the difficulty-level the harder the dungeon. Mobs will deal more damage and will have more health. Therefore it is recommended to grind in lower-level difficulties, in order to complete higher-level difficulty dungeons. The difficulties are listed below: (Starting from Pirate Island, all dungeons only have Insane and Nightmare difficulties. Hardcore and Wave Defence are able on those maps.)
Easy: This is the easiest difficulty in the game, it introduces new players to the concept of the dungeon, (including the layout, mobs, and strategies) and helps them move into medium difficulty. The only Dungeons that have this difficulty level are Desert Temple, Winter Outpost and Egg Island
Medium: This difficulty is slightly harder than easy but is easier than hard. It drops the gear required to move into the next difficulty "hard". The only dungeons that have this difficulty level are Desert Temple and Winter Outpost.
Hard: Hard is the third hardest difficulty and often will drop gear that will be needed to advance into the insane difficulty. The only dungeons that have this difficulty level are Desert Temple and Winter Outpost.
Insane: Insane is the second hardest difficulty and as a result, it drops better items, gold, and experience than the previous difficulties. All dungeons have this difficulty level, except from Egg Island, Pumpkin King and Krampus
It is recommended to farm the best possible gear here before attempting to advance to nightmare, as the difficulty increase will be the most notable when compared to other difficulties.
Nightmare: Nightmare is currently the hardest difficulty in Dungeon Quest. it will drop the best items, gold, and experience. Legendary items will also only drop in this difficulty. All dungeons have this difficulty level.
Modes: Modes can change gameplay severely. Currently, there are two modes, Hardcore and Wave Defence. Hardcore only gives each player 1 life, and if every player dies then the dungeon is over, and no loot is awarded. If the dungeon is beaten, however, 1 extra item is awarded as a prize. Wave Defence is more complicated, in where the timer is no longer existent, and the player must fight endless waves of mobs. For more information see Wave Defence.
An important thing to note is that difficulty is not the only factor in determining mob health and damage. Dungeons progressively get harder, so a run on a nightmare-difficulty Desert Temple dungeon, will be easier to beat then a run on nightmare-difficulty Winter Outpost dungeon.