The City of Caverns is a Sahuagin city built on platforms in the middle of the Sea of Swords. The sahuagin there used to have clashes with the Drow, and there is still a tunnel leading from the City to the Underdark.
The city is ruled by King Ixilthetocal although it's currently in a civil war between the King and Prince Villynaty who wants to overthrow the King. If you accepted Saemon Havarian's way out of Spellhold, the ship you use to get back to Amn will be overrun by Githyanki and then Sahuagin who will take you to their city where you caught yourself between the civil war. You will have to side with either of them and kill the other. Once done, you will be given a rope that will allow you to go down the tunnel to the Underdark. Within the caverns you will find a Priestess of Sekolah who sells various stuff.