Dwellberries can be found growing inside McGrubor's Wood to the west of Seers' Village. They are surrounded by level 44 dogs. They can also be bought from Heckel Funch on the east side of the Grand Tree on the 1st floor[UK]2nd floor[US], near Blurberry Bar for a price of 4 gold each. Dwellberries are required to make a gas mask during the Plague City quest. They can be eaten to heal 2 hitpoints.
Dwellberries are also an ingredient used in Gnome cooking. They are required to make the Vegetable batta, Tangled toad's legs and Drunk dragon.
They can also be grown in a bush patch using the Farming skill at level 36; one Dwellberry seed can produce a minimum of 4 berries, where the Farming level reduces the chance of using up one of the three "lives" of the patch, much like harvesting herb patches.
According to the book Gielinor's flora - flowers, they are thought to have curative properties, where the people of Kandarin often hang the dried berries above their windows to prevent illness. In times of particularly virulent plagues, the berries are steamed to produce an oil, which is then sniffed through handkerchiefs in order to prevent sickness.
For an exhaustive list of all known sources for this item, see here
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