Underground cig dealers are folks who sell packs of cigs in the streets, or maybe they use a house as a "hideout" for their black market version of a cig shop.
Most cig dealers are actually bootleggas....people who buy packs and cartons in a different state (or maybe even buy cartons online). And then the bootleggas re-sell the packs in the streets. These folks walk around in the downtown area of my city with a bookbag filled with Newport packs that are meant to be sold of course. Bootleggas would be hard to find in "country areas" of the USA. They a lot easier to find in my town. But I bet there ARE cig dealers out there in not-so-big cities.
A cig dealer around me could even be a low-profile criminal who's not selling weed (LOL) but Newport packs instead. Of course, those packs are actually stolen packs if he/she didn't actually buy them first. A Newport pack by me goes for 5 or 6 bucks if you buy it from someone selling packs in the streets.