Dal Lake is a small mid-altitude lake (1,775 m above sea level) near the village of Tota Rani in Kangra district of Himachal Pradesh state in northern India.

The lake is surrounded by deodar trees and is considered to be a sacred spot as there is small Shiva mandir (shrine) on its bank.

Pointing to a slab of stone, she [shri Mataji] said Durvasa Rishi had done tapasya on this shila (stone slab) and that is why the city was called Dharam shila ( धर्म शिला ), but the British pronounced it as Dharamshala!

From the book : "The Tenth Incarnation", by Yogi Mahajan, Paperback, in Volume I, Chapter 14, page 89 According to ancient legend, Sage Durvasa performed a rigorous penance in the area, which caught the attention of Lord Shiva.

Lord Shiva, in response, blessed the area with seven streams representing the Saptarishi (seven sages), and thus, Dal Lake was formed.