Sunnydale was a small Californian town, inhabited by the Slayer Buffy Summers, until shortly after the empowering of all of the Potential Slayers and the town's destruction. A college town, it housed the University of California at Sunnydale. The area of Sunnydale was a concentration of demonic energy, which had its focal point under the old Sunnydale High School, and was caused by this being the site of the Hellmouth, a gateway between the Earthly and Demonic dimensions. Sunnydale was destroyed and sank into the earth when a massive fissure opened beneath it. Fortunately for the inhabitants, the preceding sense of unrest on the streets and psychic disturbance in the town had already spurred most of the population to leave.
After it's destruction, the United States Military created a base right near the rim of the crater that was left behind. Probing for answers to Sunnydale's destruction at the hands of Buffy and the rest of the Scooby Gang, they stumbled upon Amy Madison and Warren Mears, whom the military would eventually send after Buffy.