You need to get to the light house area for this. Dive in and look for the green colour up switch. Bang into it and the water level will rise. Go onto the lighthouse area and find the Donkey Kong pad to play the blast game. After much blasting, blast through the dk ring and the seal is free.

before you can do that, you have to get Donkey Kongs banana in the lighthouse, turning on electricity. then it will activate DK"s face plate, the one where you shoot up into the sky and shoot around in barrels, once you beat that, you free him.