Cereal with extremely dry liquor (6)
I believe the answer is:
brandy
'liquor' is the definition.
(I know that brandy is a type of liquor)
'cereal with extremely dry' is the wordplay.
'cereal' becomes 'bran' (type of cereal).
'with' says to put letters next to each other.
'extremely' suggests removing the centre (only the extremes of the word are used).
'dry' with its centre taken out is 'dy'.
'bran'+'dy'='BRANDY'
(Other definitions for brandy that I've seen before include "Strong drink distilled from wine" , "Distilled wine or fermented fruit juice" , "Strong alcohol" , "warmer?" , "Alcoholic drink" .)