Breakfast? Little drink with a drop of sherry in it! (5)
I believe the answer is:
toast
'breakfast?' is the definition.
(toast is often eaten as breakfast)
'little drink with a drop of sherry in it' is the wordplay.
'little drink' becomes 'tot' (tot can mean a small drink of alcohol).
'with' indicates putting letters inside.
'drop of' says to take the initial letters (the smallest possible amount of the word).
'in it' means one lot of letters goes inside another.
The initial letter of 'sherry' is 's'.
'tot' placed around 'a' is 'toat'.
'toat' going around 's' is 'TOAST'.
(Other definitions for toast that I've seen before include "Grill - clinking of glasses" , "It may be eaten (or drunk!)" , "Breakfast item served in rounds" , "meal component" , "Cook by radiant heat" .)