The Fantasy Factory was the Valeyard's base within the Matrix. It appeared as a building and surrounding streets in the style of the Victorian era, with a light-filled carnival-style sign out front. The front office was staffed by Mr. Popplewick who tried to delay the Sixth Doctor and Sabalom Glitz from meeting with his boss J.J. Chambers, who was in reality the Valeyard.
The door to Chambers's office actually led to a dragon which almost killed Mel Bush. The particle disseminator the Valeyard planned to use to assassinate the High Council was hidden within the Factory as well. The Factory blew up when the disseminator went off. (TV: The Ultimate Foe)