Sometime after dawn on a recent Sunday, down by the resort-size pool of his Bali-style Miami mansion, Diddy interrupts veteran Chicago DJ Felix Da Housecat's bouncy house mix and gets on the mic. "This is a motherfucking party!" he announces to a designer-sunglasses crowd that includes Paris Hilton, Naomi Campbell, several NFL players and more than a few tweaky European party people. "If you're not here to party, get the fuck out of my motherfucking party! If you want to jump in the pool with your clothes on, jump in the pool with your clothes on!" As the music swells back up, Diddy marches around the dance floor furiously blowing a whistle – and then, amazingly, jumps into the pool with his clothes on. Everyone screams. Welcome to Diddy's annual Breakfast Club after-hours jam ("It's so exclusive, you'll never get in," he tweeted), the white-hot center of the weirdest, most decadent party on Earth.
Over more than a week in late March, every DJ that matters, plus hundreds of thousands of music execs, spring-breakers, jet-set ravers, Jersey Shore wanna-be's and Burning Man freaks turn nearly all of Miami – from the Art Deco hotels of South Beach to the 55,000-fan-a-day Ultra Music Festival downtown – into the planet's biggest, most candy-colored rave. Ground zero for the dance takeover is South Beach's main drag, Collins Avenue, where Swedish DJ Avicii has his own pop-up hotel, girls in lingerie and muscled-up dudes in the worst T-shirts ever ("Alcohol + Party + Molly + Sluts") fill the sidewalks, and the young Dutch DJ Afrojack repeatedly roars by in a yellow Lamborghini.
Everyone involved in what has come to be known as Miami Music Week (which grew out of the two-decade-old Winter Music Conference industry summit) has extra reason to celebrate this year: Dance music, particularly the commercial variety usually referred to as EDM, is booming bigger than ever. After building for a couple of years, Music Week feels like a full-on gold rush, with music giants Live Nation, AEG Live and, especially, SFX Entertainment (which is planning to spend more than $1 billion this year) scooping up smaller promoters and venues as fast as they can. L.A. rave institution Hard Fest was bought by Live Nation last year: "It's good to be me, here," says founder Gary Richards. At South Beach's Dream hotel, which has been taken over by Red Bull, a daily lineup of high-wattage DJs (Skrillex, A-Trak, the Detroit techno master Carl Craig) plays for an industry crowd gathered on the roof. One first-time attendee, an A&R exec for Rick Rubin's American Recordings label in town to scout talent, marvels at the vibe: "Coming from rock, the energy here is crazy."
A 20-minute taxi ride away, in downtown Miami's Bayfront Park, Ultra Music Festival's titanic sound systems and seizure-warning light shows sprawl across seven stages, making every other festival seem sedated. (A large backstage zone warns PYRO AREA. NO SMOKING.) Over two consecutive Coachella-style weekends, mega acts like Swedish House Mafia, Major Lazer and Tiësto – as well as rising DJs like Hardwell, mainstream stars like Snoop Dogg and underground heroes like Carl Cox – elevate more than 330,000 young fans with jittery, concussive electro. At almost any given time, on one or more stages, a DJ with a European accent can be heard screaming, "Make some fucking noise, Miami!"
Back in South Beach, festival-size stages spring up by the bigger hotels' pools. At the imported-from-Ibiza bash Circoloco, which features an all-star lineup of cool underground DJs, the full range of rave humanity is on display. As headliner Seth Troxler unwinds a set of twisty, lysergic house and techno, beautiful rainbow-haired women puff on e-cigarettes, and a chunky bro alone in the pool chugs an entire pitcher of mojitos. Day and night, an armada of party yachts sets sail from the nearby marina, with open bars, buffet meals and acts from New York DJ legend Danny Tenaglia to the awesomely named U.K. spinner Eats Everything. In Miami's warehouse district, parties roll on 24 hours a day, making it more than possible to never stop raving for an entire weekend. "Make sure you eat and sleep," says one manager. "It's easy to forget."
There are two dominant musical tribes in Miami this week: DJs who play underground house and techno, and acts who spin commercial EDM. Hanging out at an underground party like Get Lost, which runs from 5 a.m. to midnight, you hear a lot about Burning Man and experimental psychedelics; backstage at Ultra, the conversations are more about tour riders and big paydays. Sometimes the two worlds overlap, like at Miami's edition of Hard Fest. Outside, a line snakes around the block as bummed fans plead their case at the door. "I came all the way from D.C. for this," a skinny kid tells the bouncer, who is impressively unsympathetic: "Then go back to D.C." (As soon as the guard's back is turned, the kid vaults over the barrier and disappears into the party.) Inside, star German DJ Boys Noize, who rocked Ultra with serrated electro tracks from inside a giant light-up skull, is a surprise guest – but so is 26-year-old British dubstep pioneer Skream, who recently shocked his fans by becoming more interested in house and disco. After rocking a stylish set of tough, bouncy house tracks, he was sweaty and exhilarated backstage. "It went by so fast," he says. "It's like I was fucking a girl and almost came."
By the last Sunday, you'd think everyone would be feeling pretty crispy. But at Ultra, at least, a remarkable sunshine-people vibe prevails. Wading through the crowd, kids cool passersby with battery-powered fans and offer hugs. A raver in a wheelchair crowd-surfs at one stage; Snoop Dogg gets the crowd happily chanting, "I want to get fucked up," before busting into "Gin and Juice" at another. On the main stage, Swedish House Mafia close things out with their last-ever performance, punctuated by volleys of fireworks arcing overhead.
As much as headliners like Deadmau5 want to play down drug use in the scene, there is no denying that at least some of this happiness is chemical – and sometimes that comes with a cost. As Swedish House Mafia's anthem "Don't You Worry Child" booms over the PA one last time, a young partyer is convulsing on the ground, surrounded by a scrum of police and paramedics. Watching from the side is a 75-year-old relative of the festival's organizers, who has been coming to Ultra for 15 years. "I have an idea what happened," she says, shaking her head. "Too many drugs. This isn't church."
This story is from the April 25th, 2013 issue of Rolling Stone.