On the PC, D2:ED saves are compatible with FoV (available as a digital download only), and playing the game there is a seamless transition into the add-on. After finishing your current character, there is a patch to convert D2:ED+FoV into DKS.
Larian couldn't get FoV published by itself on the Xbox, so the only option there is to start from the beginning in DKS, or create a new level 35 character at the start of the add-on.
There were too many changes made in DKS to maintain saved game compatibility with D2:ED (redesigned flying fortresses, changes to enemy placement and loot, etc).
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