It holds cutlery for the dining room (7)
I believe the answer is:
canteen
'the dining room' is the definition.
(thesaurus)
I can't explain the rest of the clue.
(Other definitions for canteen that I've seen before include "Flask - restaurant attached to institution" , "Refectory" , "Cafe, flask and cutlery box" , "and where it could be used" , "Workers' cafe and cutlery box" .)