Leveling and skills?

I've started playing digimon Cyber Sleuth and i'm trying to wrap my head around the leveling and digivolution systems.

Correct me if i'm wrong, but from what i can tell i should get my digimon to their current stage's level cap, digivolve, get the next stage to cap, then de digivolve to increase the cap and retain some of the skills.

I'm fairly early into the game and have the complete edition and plan to play both base game and dlc.