Capital city isn't odd setting for university (5)
I believe the answer is:
tunis
'capital city' is the definition.
(Tunis is the capital of Tunisia)
'isn't odd setting for university' is the wordplay.
'odd' is an anagram indicator.
'setting for' indicates putting letters inside (inserted letters are set inside others).
'university' becomes 'U' (abbreviation as in UMass).
'isnt' is an anagram of 'tnis'.
'tnis' enclosing 'u' is 'TUNIS'.
(Other definitions for tunis that I've seen before include "Tom, Dick or Harry" , "North African location" , "N African port" , "Capital of a republic in north Africa" , "Mediterranean capital and port" .)