Monster Room

Dungeons were introduced in the "Seecret Friday Update 2" to Infdev (and happened to be the last update before Alpha mode was released). They are small rooms made of Cobblestone and Mossy Cobblestone, it is usually not very difficult to spot these, as they have walls made of Cobblestone, which is easy to spot amongst sand/gravel/smooth stone. This is the only place that Mossy Cobblestone can be found in a natural map. Caverns are sometimes connected to Dungeons, which leave an opening into the dungeon. Dungeons contain a Mob Spawner and usually one or two Chests that are either large or small. It is, however, possible, albeit unlikely,  to have dungeons with no chests. Dungeons closer to the surface have less of a chance of having chests in them. The Mob Spawner acts as a guard against the loot, spawning endless mobs until the player can steal the loot quickly, break the Spawner, or light up the room enough to stop new mobs being spawned. The Mob Spawner is always in the center of the dungeon room with chests located around the walls of the room. The chest contains treasure- Saddles, Iron ingots, Buckets, Bread, String and Records are a few things often found. It is possible to find a Dungeon almost anywhere in the ground, but rarely does a Dungeon spawn high in the stone layer of a map. Stories exist telling scenarios where dungeons are found in unusual locations, such as when a player has reported finding a Dungeon right under 3 blocks of his spawn location. Other users have taken pictures of Dungeons set into a hillside or buried by sand/water in the ocean.

Dungeons can quickly be located using an up-to-date infinite map viewer. To locate them, set the viewer to show only mossy cobblestone (data value 48) or locate cobblestone (data value 4) that you did not place. Play the save file and head out to one such place and dig down until the Dungeon is found. The viewer must be up-to-date, or it may crash upon trying to load blocks that it doesn't recognize.

Dungeon Game Mode
It is possible that adventure mode will be based upon dungeons.
 * See the Adventure Mode Article

A video of a Dungeon being found.

Another above-ground Dungeon.