How and where is the location to defragment an iMac?

There is no need to defrag your hard drive thus no app on your Mac only three party apps. Try using disk utility to verify/repair your hard drive. http://support.apple.com/kb/HT1782?viewlocale=en_US&locale=en_US

No need to defrag OS X.

See this article.

http://macs.about.com/od/faq1/f/defrag.htm

Defragmentation in OS X:

http://support.apple.com/kb/HT1375 which states:

You probably won't need to optimize at all if you use Mac OS X. Here's why:

• Hard disk capacity is generally much greater now than a few years ago. With more free space available, the file system doesn't need to fill up every "nook and cranny." Mac OS Extended formatting (HFS Plus) avoids reusing space from deleted files as much as possible, to avoid prematurely filling small areas of recently-freed space.
• Mac OS X 10.2 and later includes delayed allocation for Mac OS X Extended-formatted volumes. This allows a number of small allocations to be combined into a single large allocation in one area of the disk.
• Fragmentation was often caused by continually appending data to existing files, especially with resource forks. With faster hard drives and better caching, as well as the new application packaging format, many applications simply rewrite the entire file each time. Mac OS X 10.3 onwards can also automatically defragment such slow-growing files. This process is sometimes known as "Hot-File-Adaptive-Clustering."
• Aggressive read-ahead and write-behind caching means that minor fragmentation has less effect on perceived system performance.