In icefall cave.
Waterfall
do the errand for bill on one island.
Four Island
Go to four island and enter icefall cave HM7 is in there and its waterfall.
Go to four island and go in icefall cave find HM7 then use it to go up the waterfall go to the ladder then defeat the rocket talk to lorelei then leave and go to six island go back to the cave and the guy will not be there use Cut to open the door.
You find the HM7: Waterfall in Icefall cave on island 4. go to the right on island four, use surf to cross the pond/lake and enter the cave from there. Inside Icefall cave you also find nevermeltice. Try the link below to a walkthrough on youtube (not mine). This video shows how to get it.
It is in Four island
island four or island five.
Only in firered and leafgreen can you venture to the sevii islands and four island.
It's on four island.
Go to four island and go in icefall cave find HM7 use it to go up the waterfall go to the ladder beat the rockets talk to lorelei go to six island and go to dotted hole the scientist should be gone use Cut to open the door.
Four Island, Icefall Cave.