Dance — function taking place south of Latvian capital (8)
I believe the answer is:
rigadoon
'dance' is the definition.
(thesaurus)
'function taking place south of latvian capital' is the wordplay.
'function' becomes 'do' (I've seen this in other clues).
'taking place' becomes 'on' (as in a phrase like 'the event is on now').
'south of' says to put letters next to each other.
'latvian capital' becomes 'riga' (I've seen this before).
'do'+'on'='doon'
'doon' after 'riga' is 'RIGADOON'.
(Other definitions for rigadoon that I've seen before include "Old dance" , "dance music" .)