Line that is found in story (3)
I believe the answer is:
lie
'story' is the definition.
(story can mean a fabrication)
'line that is' is the wordplay.
'line' becomes 'l' (used when specifying particular lines from a poem).
'that is' becomes 'ie' (abbreviation for id est, 'that is' in Latin).
'l'+'ie'='LIE'
'found in' is the link.
(Other definitions for lie that I've seen before include "Perversion of the truth" , "Tell tales" , "A white one is considered harmless" , "Fabrication" , "Assume recumbent posture" .)