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.
Waiting Room
The Fantasy factory had a "Waiting Room" which led to a danger or an illusion of danger which turned out to be a manifestation created by the Valyard with use of the Matrix. When the Sixth Doctor entered the waiting room it turned out to be a beach where the doctor was dragged in to quick sand by hands grabbing at his feet. The doctor escaped once he realized it was all an illusion. Mel Bush briefly opened the door to the waiting room, but slammed the door shut when confronted by flames protruding from a dragon.
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)