Dali is small enough to walk around in a morning, though you'll be slowed down by the crowds of hawkers, farmers and shoppers who descend for the Friday market . Most places of specific interest are along Fuxing Lu, but the narrow stone side streets are good for a wander. Get your bearings from on top of Dali's old south gate (¥2) where you can study Xiaguan, Er Hai Lake, the town and mountains from the comfort of a tea house. Dali's antique pagodas stand as landmarks above the roof lines, Yita Si due west, and the trinity of San Ta a few kilometres north; below is a busy artisans' quarter where carpenters and masons turn out the heavy and uncomfortable-looking tables and chairs inlaid with streaky grey Dali marble that lurk in Chinese emporiums around the world. Mined up in the hills, smaller pieces of marble are worked into all sorts of souvenirs - rolling pins, chopping boards, miniature pagodas - which you can buy from shops and stalls in town.

The Dali Museum (Tues-Sun 9am-5pm; ¥2) is opposite the bus compound, just 50m or so inside the gate. Built for the Qing governor and appropriated as Du Wenxiu's "Forbidden City" during his insurrection, the museum takes the form of a small Chinese palace with stone lions guarding the gate and cannons in the courtyard. Historic relics include a strange bronze model of two circling dragons, jaws clenched around what might be a tree, a few Buddhist figurines from the Nanzhao period, and some lively statues of an orchestra and serving maids from a Ming noblewoman's tomb - a nice addition to the usual cases of snarling gods and warrior busts. With the mountains behind, the gardens outside are pleasant, planted with lantana and bougainvillea.

North along Fuxing Lu, young and old socialize in the square outside the library , playing dominoes or video arcade games according to their interests. A few doors along is the Bank of China (foreign exchange daily 9-11.30am & 2-5pm), with Dali's international telephone counter at the post office (where you have to pay for everything, even the overseas postage forms; daily 8am-8pm), a little farther on at the Huguo Lu crossroads. Huguo Lu's western arm forms the core of the budget travellers' world, a knot of cafés , cheap tailors, bilingual travel agents happy to book you on tours or long-distance buses, and massage clinics advertising their services with couplets like "Painful In, Happy Out". It's also the best place to purchase beautiful jewellery and embroideries (many from Guizhou's Miao), and attractive Bai tie-dyes off hawkers - asking prices are ludicrously high, dropping swiftly once bargaining commences. Don't show any interest unless you really want to buy, or you'll be mercilessly hounded.

Farther north again on the corner of Fuxing Lu and Yu'er Lu, Yu'er Park (entrance on Yu'er Lu; ¥2) is a peaceful refuge from Huguo Lu's hard-sell perils, frequented by locals and full of camellias, fruit trees, palms and ponds linked by tidy paths. The backstreets north of the park are some of the nicest in Dali; places to seek out include a stone church and a blacksmith , the latter decorated with inventive animal sculptures made from scrap iron. Fuxing Lu itself terminates at the north gate (¥2), which can also be climbed.