In a compound, small tree (5)
I believe the answer is:
aspen
'tree' is the definition.
(aspen is a kind of tree)
'in a compound small' is the wordplay.
'in' means one lot of letters goes inside another.
'compound' becomes 'pen' (I can't justify this - if you can you should believe this answer much more).
'small' becomes 's' (abbreviation - e.g. clothes size).
'a'+'pen'='apen'
'apen' placed around 's' is 'ASPEN'.
Can you help me to learn more?
(Other definitions for aspen that I've seen before include "Tree with shivering leaves" , "Trembler" , "Its leaves flutter in the slightest breeze" , "Colorado winter sports town" , "that's wooden" .)