It is located south of Minefield and northeast of Vault 101, past the Potomac River. Specifically, it is almost exactly four squares north and three east of Vault 101.
Looping along the south side of the scrapyard is an elevated railway which, along with bordering roads, puts it in a makeshift depression. Even further south is simply geography sloping downwards into the river basin.
The scrapyard can be entered through several breaches in the southwest, west, or north sides or through multiple gates on the south side.
Northwest from the scrapyard, along the road, there is a skeleton in a chair with a BB gun and some rounds, as well as a Nuka-Cola Quantum across from a fenced in power station. In the power station on the side closest to the BB gun chair that power line structure on top are a few bottles you must shoot down in order to get the other Nuka-Cola Quantum.
A 'Type B' random encounter is also located just outside the southern fence line near main gate. The encounter will spawn by proceeding westward along the fence toward to edge of the scrapyard.
When initially entering the scrapyard, Dogmeat (a companion) can be found fighting raiders towards the northeastern corner. You will hear gunfire as you approach this location. There will be at least three raiders that Dogmeat is fighting, as well as a dead scavenger. These raiders have a significantly lower amount of Hit Points than normal.
Usually by the time your character reaches the 3 or 4 raiders, Dogmeat will have already killed all of them. Whether or not they are all dead before you get there depends on how much time it takes for the player to encounter the situation. Coming in from different directions will also affect whether the raiders will still be alive by the time you arrive.
The office at the southern end can only be accessed after taking the Contract Killer perk. Prior to obtaining the perk, the door to the office will be locked, and won't be pick-able.
The ammunition box containing the skill books can be extremely difficult to see amongst the burnt-out husk of the bus. While standing in the wreckage, it is at the bottom of the small set of steps.
If you try to resurrect the dead scavenger using the console command RESURRECT, his/her head will explode immediately. Using the setessential command, you can make him/her survive this (sometimes grotesquely), but they will probably have no caps and only have a bottle of whiskey to sell (Base 6a776, Ref 7db9e).
The sky crane platform isn't accessible except with console commands.