The next sentence: al lado del teatro – next to the theatre.
Next to the theatre, perhaps in Madrid, there is a fenced-off area where people queue to get in. Everyone there is laughing and holding a tin so they can have a drink on the way in (al lado) – the German “alle” (“everyone”), “lachen” (“laugh”) and “Dose” (“tin”) give you the sounds.
The tin has a dent in it because it is so crowded (del, from the German “Delle”, “dent”). The theatre is painted red (teatro; the German for red is “rot”).