Where does magic come from in the CT world? Does it come from within, is
it from Lavos, is it from the earth? Here's one theory. Please keep in
mind I've never played Chrono Cross and I may be revamping/adding to my
theory many times.

Thanks to Captain Faris for this quote from Chrono Cross to get me going:

"All life on this planet was born in the sea. The life-forms softly
slumbered within the womb of our mother sea... Until eventually they
developed free will and were able to swim about the ocean freely. Then
there came those that, not satisfied with life in the water, looked up
from the ocean floor towards the blue skies and dreamt of the feel of the
land. Aeons passed before their preposterous dream became a reality, and
they rose up from the seas onto the earth. The land became full of all
kinds of creatures. Among these, the dragon lizards and the more evolved
Reptites thought they would reign over the earth forever. And for a long
while it seemed like they would... However, the unforeseen coming of the
mighty one from the heavens suddenly smashed their kingdom to pieces.
That one was known as "Lavos!" The great crimson flame...... Wielding
absolute power, Lavos buried the dinosaurs - the kings of the land - in
the space of a night. However, the timid "apes" who had lived hidden in
the forests... ...came into contact with the crimson flame that fell from
the sky, and evolved into "humans." Or perhaps it was not "evolution,"
but "transformation." In this way, humans increased in number and filled
the earth... The fearsome "progeny of Lavos" who, like their progenitor,
began to devour our mother planet."

I have no idea who said this, so I do not know if we can take it as an
absolute "truth" or not. However at the very least we can take it as an
account of what is believed to be the beginning of mankind - strikingly
similar to many accounts we have already heard - man comes in contact
with something evil, an "enlightening" occurs, and man is changed
forever.

Notice I used the term enlightening - not enabling. In Christian
accounts Adam has free will - and chooses to sin. According to this
account, "apes" must have had free will, since the creatures in the sea
had developed it eons before apes existed. So the transformation that
occurs is not free will. Thus the correction in this passage, "or
perhaps it was not 'evolution', but 'transformation'", represents a
change similar to that of Adam - the ability was always there, it just
hadn't been realized.

You can see for yourself that the cavemen in CT are not that much
different from other humans. Then, if not an evolutionary change (which
obviously had enough time itself - 65,001,000 years - to get to where
Crono is, in terms of evolution) what was the change? Already we have
concluded that it is not free will.

Could it be evil? It says the "progeny of Lavos" (humans) began to
devour the planet after Lavos fell. Well, obviously evil already existed,
since the Reptites are evil. Or perhaps evil in humans? Well, Kino
stole from Crono, in order to serve his own purposes. Remember - the
only thing that those in power want, is more power. The Reptites had
power, and they just wanted more. Lavos is not the source of evil. He
may be evil, however he is not the source of evil. Evil comes from
within.

Perhaps the answer comes from Spekkio, the self-proclaimed "God of War":
He tells Ayla that she comes from a time before magic existed. We can
assume that Spekkio is correct, since he is a being obviously from a
different plane of human existence, being more powerful and intelligent
than humans.

So if Spekkio is correct, that points to the fact that before Lavos,
magic did not exist. After Lavos, it did.

The only difference I see between the "apes" (cavemen like Ayla
(cavewoman?)) and the people of later eras (humans) is the fact that
humans can use magic. But what about the Earthbound people in 12000 BC?
They do not use magic. That does not necessarily mean that they cannot
use magic. Surely after 65 million years, the people who came in contact
with the "crimson flame" had been integrated into all humans, which means
that everyone has the ability to use magic from (at the very latest)
12000 BC on.

So why wouldn't the Earthbound people use magic? If the ability is
within them, perhaps they need it to be awakened. Like evil, which comes
from within, and is sparked by power, greed, etc., magic needs a spark
too. Hope, faith, and dreams...

Obviously it is much easier to bring evil to the surface than it is
magic. So in order for magic to be more accessible to humans it gets a
little kick-start. So what gets the ball rolling?

Dreamstone is known to (among other things) help to bring human dreams (hopes) to
fruition. Working with the human dreams, it unleashes the ability to use
magic within. So magic could always be used by humans, it just needed to
be discovered.

So why didn't Dreamstone work in this way before Lavos landed? Ayla
possessed the "rare red rock" yet she couldn't use magic.

Assuming Spekkio was correct, that Ayla was in fact from a time before
magic existed, then Lavos did not possess magic before landing on the
earth. So magic could not have come from Lavos. But here we run into a
problem:

"That one was known as 'Lavos!' The great crimson flame......"
"[Apes] came into contact with the crimson flame that fell from the sky, and
evolved into 'humans'."

Assuming that "crimson flame" is another name for Lavos, when apes came
in contact with Lavos, they transformed into humans. So how could magic
not come from Lavos?

I refer you to the Mammon machine. When the Crimson Knife, obviously
made from Dreamstone, came in contact with the power of Lavos (via the
Mammon Machine) transformed into the Masamune. This leads us to two
interesting conclusions - Lavos has the power to transform, and
Dreamstone can harness the power of Lavos...as one person on the boards
put it...the crimson knife "absorbed" the power of Lavos.

So if Lavos's power can transform, it could very well be that his power
gave the apes the ability to use magic, thus making them humans (please
note - Lavos's power did not give apes magic, merely the ability to use
magic.) Also, the power from Lavos was absorbed by Dreamstone - not very
much at first, but as the years went on, Lavos became stronger, and so
did the power within Dreamstone, as Lavos's power was exposed to it.

Now I will argue that Lavos intentionally gave apes the ability to use
magic.

Since Lavos benefits from the evolution of the planet, and the abilities
of everything on it, why wouldn't he want humans to be more powerful? As
long as their abilities did not match that of Lavos, Lavos was safe...so,
it was a risk, to make himself more powerful in the future, when he fused
the DNA of humans with himself.

But how to defend against the magic of the humans? As we can deduce from
Spekkio's statement, Lavos was not able to use magic. He must have known
that the humans could use it. So did Lavos give humans the ability to
use magic, in order to fuse their DNA with his and give himself the
ability to use magic? My answer: No.

Lavos was a result of the DNA of many organisms - but he himself was a
unique one. Rather than many separate DNA, his DNA must have been a
fusion of all of the DNA he had collected. That is why he looked
different than all other species on earth (and was able to give birth to
other creatures that looked like him, and not like any specific creature
of earth). Though the ability for humans to use magic was in the DNA,
Lavos was not able to use magic, since he was not human.

But if humans could use energy that Lavos could not, then humans could,
conceivably, become more powerful than him. So Lavos needed a way to use
magic. One solution: control humans that could use magic. Unfortunately
for Lavos, it appears that Lavos did not have the ability to control
people, to use them as puppets. He was, however, able to give them
power, which would corrupt them, but their motives would still be their
own, to get more and more power, and not necessarily in line with what
Lavos wanted them to do.

So how could Lavos use magic? Needing to control something to use magic,
Lavos would have to create a creature that he could control. Because the
free will of humans would determine which direction the progression of
magic would go, Lavos could not simply create a creature that used magic
like humans. Eventually, using a different magic that was more powerful,
Lavos's creature could be rendered obsolete. So he had to create a
creature that would progress with the humans. The creature's abilities
would mirror those of humans, and Lavos would always be even with humans
in magic power. Physical power was obviously already in his favor. So
as long as Lavos was more physically powerful than humans, he could not
be destroyed by humans.

The creature he created to control was Spekkio - "The God of War". The
more powerful people are - and they become more powerful in times of war
- the more powerful he is. A reflection of the magic that humans could
use at the time, and as long as Spekkio's abilities were even with the
humans' then Lavos was safe, assuming he was more physically powerful.

Being a reflection of human ability, Spekkio was around as long as
humans, and their ability to use magic was around - until the End of
time. And even then, humans existed...good ol' Crono and the gang. As
humans and their ability to use magic was there, so was Spekkio. And
Lavos was not there, so he could not control Spekkio.

So why would Spekkio unleash magic within Crono and the others? To get
revenge on Lavos? Probably not. It all goes back to: Those who have
power only wish to have more power. Spekkio sees that the party is
stronger in order to make himself stronger.

Conclusions:
*Lavos gave apes the ability to use magic, transforming them into humans,
and making them more powerful in order to make himself more powerful when
he fused human DNA with his own.
*Dreamstone, being able to absorb energy from Lavos, and thus becoming
more effective, can help to unleash the humans' ability to use magic.
*In order to use magic to his advantage, and secure himself from the
humans, Lavos created Spekkio, a reflection of human magic, in order to
control him. The more powerful human magic was, the more powerful
Spekkio was.