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' indicates an anagram.
'setting for' is an insertion indicator (inserted letters are set inside others).
'university' becomes 'U' (abbreviation as in UMass).
'isnt' anagrammed gives 'tnis'.
'tnis' going around '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" .)