The Forge of the Nine is a smithy located in Baldur's Gate's Lower City west of the Elfsong Tavern.
Dammon can be found here working the forge if he has survived Act 1 and Act 2. Otherwise no vendor will be present at the location.
Basement
The basement of the Forge of the Nine can be accessed by getting past a locked door on the west facing side of the building. The basement contains an assortment of enchanted weapons and armour. A breakable wall can be found behind some crates that lead to the Devil's Fee's basement.
Notable Loot
Additionally the trader will sell arrows, dyes, and other enchanted weapons and armours.