He's at the remote island far from edea's orphanage. once there you'll have to go to the blue thing in the middle and fight 2 ruby dragons, don't give up though. The last question asked has a secret option, so scroll right to the bottom and you'll see the couser pointing to a blank space, choose that answer and after that you'll be fighting him.

bahamut is found in the deep sea reactor in the location not shown. it is in the bottom
left corner of the world map. you must answer three questions after each one right or
wrong you have to fight a ruby dragon, however after the 3rd you face bahamut. oh yeah
mine is better explained ps. last option is hidden.