The Flumes are an underground river system that has carved a series of passageways beneath SlugTerra's caverns. It bares some resemblance to sewers.
The Flumes first appeared in Undertow, when the Shane Gang used them to escape from Blakk's henchmen. This location appeared again in "The Journey Home", when Eli's slugs ended up there by accident.
The Flumes are used in part of some kind of logging operation, where an automated machine gathers logs from the Flumes, cuts them, and then incinerates them.
According to Trixie in the Slugisode "Pack Your Slugs!", you can go fishing here as it is connected to Undertow Cavern, where the fishes come from.