Ogre's inside a German cave (6)
I believe the answer is:
grotto
'cave' is the definition.
(I know that grotto is a type of cave)
'ogre's inside a german' is the wordplay.
'inside' indicates the central letters.
'a german' becomes 'otto' (common German name).
The middle letters of 'ogre' are 'gr'.
'gr'+'otto'='GROTTO'
(Other definitions for grotto that I've seen before include "Small cave as at Lourdes" , "It's left on Dec 24 by Santa and his reindeer" , "Attractive natural, or artificial, cave" , "fancy underground area" , "Fancy cave" .)