Virginia Democrat meets Unionist unknown in capital (5)
I believe the answer is:
vaduz
'capital' is the definition.
(capital of Liechtenstein)
'virginia democrat meets unionist unknown' is the wordplay.
'virginia' becomes 'va' (US state abbreviation).
'democrat' becomes 'd'.
'meets' means one lot of letters go next to another.
'unionist' becomes 'u' (abbreviation as in Democratic Unionist Party).
'unknown' becomes 'z' (algebra).
'va'+'d'+'u'+'z'='VADUZ'
'in' is the link.
(Other definitions for vaduz that I've seen before include "Capital of Liechtenstein" , "Liechtenstein's capital" .)