City that has modern light source in also (6)
I believe the answer is:
toledo
'city' is the definition.
(Toledo is a Spanish city)
'modern light source in also' is the wordplay.
'modern light source' becomes 'LED' (light-emitting diode).
'in' means one lot of letters goes inside another.
'also' becomes 'too' (synonyms).
'led' inserted within 'too' is 'TOLEDO'.
'that has' acts as a link.
(Other definitions for toledo that I've seen before include "Spanish city on R. Tagus" , "Maker of 3 [[COLD STEEL]" , "Spanish city noted for swords" , "Spanish city known for swordmaking" , "To dole out in the Spanish city" .)