I love a proper dive bar and I love seeing live music. One of the only problems with that combination is often that the music often suffers due to technological deficiencies.
Bunkhouse Saloon is the perfect marriage of the two. It is a dive bar in spirit (and price) but the sound system is top notch and well designed for the intimate space.
With a 250 person capacity in a room that probably shouldn't be holding more than 200 at the very most, be prepared to be packed like sardines in here depending on the band/night. I saw Built to Spill (w/ Braided Waves) here on a Monday night and the place was packed to the gills. But the sound and sight lines were excellent from everywhere in the venue that I went. You can even hear the music outside in the spacious outdoor courtyard (with separate bar).
They have Hamm's on tap (first bar I have ever seen this at, I am from Michigan). A bunch of other great taps and bottled & canned beers, plus a perfectly serviceable liquor collection. They also have a small variety of odds & endsy hipstery menu items to choose from, such as Deviled Eggs and Sloppy Joe's. Prices, as previously mentioned, are perfectly reasonable.
Whether you are a local or in town for business/pleasure, definitely look up who is playing at the Bunkhouse and make your way over here if there is anyone you're interested in seeing. Great club!