Xenotime is a town in the desert famous for its goldsmiths. At one time, Xenotime was a lush, green, town. When the townspeople discovered a gold vein however, they started digging which reduced the topsoil, destroying the town's lush environment. This city is exclusive to the Light Novel the Land of Sand and the 2003 anime.
In the light novel Fullmetal Alchemist: The Land of Sand and the 2003 anime, Edward and Alphonse Elric visit Xenotime to get some leads on the Philosopher's Stone. While there, they discover that someone has been using their names and trying to create a Philosopher's Stone. During the night, Ed and Al sneak into the lab to read the imposters' notes, getting caught in the process. The imposters reveal themselves to be Russell and Fletcher Tringham. A fight ensues between the older brothers, Edward and Russell, but is stopped by Alphonse and Fletcher. Ed and Al leave before they get caught and decide to come again the next day.
They come again for a few more nights and eventually, Ed and Al find the notes and how Russell has been trying to make the stone. Russell has been using the Red Water that his father made and trying to reverse engineer a Philosopher's Stone. The plan was partially successful as the brothers created some trial Stones, however Ed concludes that its impossible to create a reverse-engineered Philosopher's Stone. Russell appears to the Elrics at that point, and once more starts a fight with Edward. This time, no one is there to stop them until Ed and Al escape through a tunnel that Fletcher transmuted.
Eventually, Russell and Fletcher get caught as frauds and thrown into the cellar by their employer, Mugear. Mugear tells them about their father, Nash Tringham, and how he knew that they weren't really the Elric brothers at all. He then leaves them to their own devices and brings Edward and Alphonse in to work for him. Edward decides to see the Tringum brothers before agreeing to free them and slashes open the bars of the cell. The brothers escape and Edward learns what really happened to Nash instead of going missing.
Edward and Mugear get in a fight, but Mugear is a formidable opponent with the Stone. Russell comes back and helps Edward defeat Mugear. While the older brothers were fighting Mugear, Al and Fletcher set fire to the laboratory, burning it to the ground. At the end, Edward and Alphonse leave Xenotime with the thanks and apologies of the townspeople.