Everyone participating in fancy dance (6)
I believe the answer is:
ballet
'dance' is the definition.
(ballet is a kind of dance)
'everyone participating in fancy' is the wordplay.
'everyone' becomes 'all' (I've seen this before).
'participating in' indicates putting letters inside.
'fancy' becomes 'bet' (I am not sure about this - if you are sure you should give a lot more credence to this answer).
'all' inserted within 'bet' is 'BALLET'.
Can you help me to learn more?
(Other definitions for ballet that I've seen before include "Let lab open up for dance" , "The Nutcracker or Giselle, say" , "Nureyev's forte" , "The theatre of dance" , "Type of dance" .)