I haven't got my card with me, so I can't answer #1, but assuming you can play it...
2. You don't move the villain. The card doesn't say that. It just says the character moves. Character 1 would get the "At This Location" effects for location B and you'd continue the encounter (just sort of long distance now). Check out this thread for more on that topic.
3. You close the villain's location (location A).
If You Defeat the Villain, Close the Villain’s Location.
"When another character encounters a card, you may discard this card to move yourself to or from that character's location."
-Dimension Leap, S&S Spell 3
1. Since this doesn't exclude summoned cards, the play appears to be legal: C1 can play Dimension Leap and move to B when the summoned card is encountered.
2. The villain stays at A (and adopts any location powers from there,) while C1 is at B (and adopts any location powers there.)
3. C1 closes A.
Different but similar question, regarding villain encounters and movement:
Player A encounters a villain with player B at the location. Is it possible for Player B to use dimension leap to move to another location in order to attempt to close it, or does closing locations happen before the 'When you encounter' effects would trigger. I had ruled it okay at the time, and if I'm wrong may keep it as a house rule, but I'm genuinely curious how the timing is supposed to work. (The actual event in our case was S&S Valeros's role card power to move when a villain is encountered, but I think it's the same principle.)
Hmm, I'd personally rule that it would not be allowed, given the following text in the rulebook (emphasis mine):
When a character encounters a villain, each character at any other location may immediately attempt to fulfill the When Closing requirement for his location
For me, the word immediately indicates that I have no chance to react to that step by playing cards or using powers, so I would not be able to move to a different location first.
Furthermore, that text is in the "Attempt to Temporarily Close Open Locations" section, which appears above the "Encounter the Villain" section, so it is not clear that the villain encounter has even started at that point, so Dimension Leap may not be able to be played anyway (wording on the text quoted above implies the villain was encountered already in that step, hence why this is unclear to me on whether or not the encounter is live during the attempt to close step).
Different but similar question, regarding villain encounters and movement:
Player A encounters a villain with player B at the location. Is it possible for Player B to use dimension leap to move to another location in order to attempt to close it, or does closing locations happen before the 'When you encounter' effects would trigger. I had ruled it okay at the time, and if I'm wrong may keep it as a house rule, but I'm genuinely curious how the timing is supposed to work. (The actual event in our case was S&S Valeros's role card power to move when a villain is encountered, but I think it's the same principle.)
Closing happens during the when-encounter step... however, it's explicitly immediately.
Thus:
C1 and C2 are at location A. C1 encounters the villain.
C2 NOW has a chance to immediately temp close, but can't, because she isn't at a different location. So the opportunity passes.
C2 may now play Dimension Leap.
Now... in the Tactician Valeros case:
C1 is at A; C2 is at B. C1 encounters the villain.
This time, C2 may temp close B, and then play Dimension Leap after that. (Tactician Valeros would work this way also.)
I thought that might be the case, thanks for clearing it up! (I didn't notice the immediately)