This guide should be used as a last resort. You will loose all your music, apps, mods, themes, etc. and your device will need to be rejailbroken. You can sync your device to iTunes to replace anything that didn't come from Cydia after you restore, but things you got from Cydia will be deleted. You should back up any files you can't replace with the restore.


Use the following steps to restore your device:

  1. Make sure you have the latest version of iTunes installed and running before attempting to update.
  2. Connect your device to your computer.
  3. Select your iPhone, iPad, or iPod touch when it appears in iTunes under Devices.
  4. Select the Summary tab.
  5. Select the Restore option.
  6. When prompted to back up your settings before restoring, select the Back Up option (as seen in the image below). If you have just backed up the device, it is not necessary to create another.

                                               

      7. Select the Restore option when iTunes prompts you (as long as you've backed up your device, you should not have to worry about restoring your phone).

                                          

       8. Once the restore process has completed, the device restarts and displays the Apple logo while starting up:

                                         

     iPhone only: For the iPhone only, after a restore, the iPhone displays the "Connect to iTunes" screen. Keep your device connected until the "Connect to iTunes" screen goes away or you see "iPhone is activated." If iTunes does not have an Internet connection, you cannot complete this step.

                                                          

      9. The final step is to restore your device from a previous backup. Once your device is restored and—in the case of the iPhone—in the process of activating,
          you should be able to see the following in iTunes:

                               
                                 Select the backup you want for your device and select the Continue button to complete your device's restoration.

    If you do not want to restore from backup, select "Set up as new…" If you want to preserve previous backups that iTunes has made, be sure to back up the
        appropriate directory before choosing to set up as new.

From, Apple.com


In some extreme cases your device might not show up in iTunes. If this happens you need to get your device into DFU (Device Firmware Update) mode for it to show up. After you follow these steps try the steps above to restore your device. These are the steps to get your device into DFU mode,
  1. Open iTunes and connect the iPhone to your computer.
  2. Press and hold the Home button and the Sleep/Wake button at the same time.
  3. After exactly 10 seconds release the Sleep/Wake button. Continue holding the home button until you iTunes pops up a message telling you that it has detected an iPhone in recovery mode.
  4. The iPhone screen will remain black.
  5. Your computer should say the device is connected and iTunes should recognize it. If it doesn't, try these steps again.

Sometimes it takes a few times to get your device in DFU mode.

 
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