Budapest was the capital of Hungary. It was the location of the famous Buda Castle where Vlad the Impaler was once imprisoned. The River Danube flowed through Budapest. (AUDIO: The Labyrinth of Buda Castle)
During the Year That Never Was, Martha Jones claimed to have gone to Budapest to collect one of the vials of liquid needed to arm the gun she was allegedly preparing to kill the Master with. (TV: Last of the Time Lords)
Behind the scenes Edit
Though it's possible that a real world location doesn't exist in the same geographic space in the Doctor Who universe, such cases are few and far between. Thus, the map at right is probably a good indicator of the DWU location of Budapest.