As of yesterday, Fan Fiction has a new home in the Literature gallery! 
Literature > Fan Fiction
Before, Fan Fiction was located under Fan Art. This was due to the desire to keep all fan created works together. (FAQ #572: What does DeviantArt consider "Fan Art" to be?) However, this caused confusion and many fan fiction stories were miscat into the Literature gallery. By moving Fan Fiction under the Literature gallery, we're hoping to make searching for and submitting new works easier, and to cut back on the number of miscats.
Here's a screenshot of the submission screen, showing Fan Fiction's new home. 
Both the Literature and Fan Fiction galleries updates are still in the works. Please use whichever gallery and subgallery best suites your piece.
Please help spread the word of Fan Fiction's new home! Check out and fav the official announcement journal. 
If you have any comments, questions or concerns, please feel free to leave me a comment or a note! I'd love to hear from you.
