Just like the title tells us, this takes place in a laboratory. We don't get a lot of details, but the ones we do get give us a pretty good feeling for the atmosphere. There's smoke and dust and mysterious potions all over the place. The speaker even calls it a "devil's-smithy." We imagine it looking like a mad-scientist's lab in a horror movie—dark and gloomy and full of strange and creepy things. It's a place for evil plans and gruesome talk. In other words, it's just the right location for this twisted tale.