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Forge of the Nine
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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 key can be found in the Mailbox near the door on the main floor). 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
Sold by Dammon:
Found in a Gilded Chest in the basement: