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 simple 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 across from a fenced-in power station, there is a skeleton in a chair with a Nuka-Cola Quantum. On top of the power line support structure inside the fence, on the side closest to the chair are some bottles arranged for target practice, including another Nuka-Cola Quantum which can be shot down.
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.
Upon first entering the Scrapyard, Dogmeat (a companion) will be heard fighting raiders towards the northeastern corner. Whether or not the raiders are dead by the time the player reaches them depends on how long the player takes to reach them. These raiders have a significantly lower amount of Hit Points than normal. Alongside the dead raiders will be a dead scavenger.
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.