The Skullery is a bar in the cellar of a building in Draynor Village, where a gang called The Skulls have taken their residence. It is not their official headquarters, but Khnum says it is their hangout place where they can "unwind". It plays a role in the quest Stolen Hearts.
Inside there are three skull mercenaries, a bouncer, and Khnum (only during Stolen Hearts). Khnum is the only interactive NPC here, and furthermore this place has no use besides the quest.