Bíldudalur is a village situated on the coast of Arnarfjörður, one of the Westfjords and has 166 inhabitants (as of January 2011).
It is nestled deep in a fjord against some intimidating mountains, comprised of what appears to be two or three streets and a handful of small houses.
Bíldudalur is like many small towns and villages in the Westfjords, but, Bíldudalur is also special for two reasons.
First, the location itself shields the village from Iceland's characteristic relentless winds, making the weather relatively fair all year round.
Second, it sits on the shores of Arnarfjörður, home to the bulk of Iceland's sea monsters. In fact, Bíldudalur has a museum dedicated to these creatures.
Reference: http://www.grapevine.is/Travel/ReadArticle/You-Will-Believe-In-Bildudalur-Visiting-The-Sea-Monster-Museum
Reference: Wikipedia