All of the population of Djibouti lives in Djibouti City. It is not just the capital, it is the only city in Djibouti.
The city has been influenced very strongly by the French. It is not a very attractive city however, but it is an excellent – if not the only – base for exploring the inland with its dormant volcanoes and lakes as well as the Red Sea coast and the islands.
From Djibouti there is a train leaving for Addis Ababa in Ethiopia via Harar. The French built the whole system because they wanted Djibouti to be the major port for all of Ethiopia. This would be a very cool way to travel to Addis.