Fine Happy Mondays dancer out of his head in city abroad (3)
I believe the answer is:
fez
'city abroad' is the definition.
(Moroccan city)
'fine happy mondays dancer out of his head' is the wordplay.
'fine' becomes 'f' (abbreviation).
'happy mondays dancer' becomes 'Bez' (member of the Happy Mondays).
'out of his head' means to remove the first letter.
'bez' with its initial letter removed is 'ez'.
'f'+'ez'='FEZ'
'in' is the link.
(Other definitions for fez that I've seen before include "Red hat with black tassel worn by some Muslims" , "Felt hat" , "Egyptian tasseled hat" , "Tarboosh" , "Old Turkish hat" .)