Where might one find bubbles? In a half of bubbly — fancy that! (7)
I believe the answer is:
bathtub
'where might one find bubbles?' is the definition.
(a bathtub might contain bubbles)
'in a half of bubbly fancy that' is the wordplay.
'in' means one lot of letters goes inside another.
'a half of' means to take half the letters.
'fancy' is an anagram indicator.
'bubbly' halved is 'bub'.
'that' with letters rearranged gives 'atht'.
'bub' going around 'atht' is 'BATHTUB'.
(Other definitions for bathtub that I've seen before include "Place to wash (US)" , "Vessel in which one washes oneself" , "Soaking receptacle" , "Where to soak (mainly US)" , "Need this to be clean" .)