City stores record in volcanic hill (7)
I believe the answer is:
cologne
'city' is the definition.
(Cologne is an example)
'record in volcanic hill' is the wordplay.
'record' becomes 'log' (log is a kind of record).
'in' is an insertion indicator.
'volcanic hill' becomes 'cone' (I am not sure about this - if you are sure you should give a lot more credence to this answer).
'log' going inside 'cone' is 'COLOGNE'.
'stores' acts as a link.
This may not be correct. It may be part of another bit of the clue.
Can you help me to learn more?
(Other definitions for cologne that I've seen before include "German river port" , "smells nice" , "Perfumed liquid made of oils and alcohol" , "Town" , "Refreshing scent" .)