Buses to Estelí  will deposit you in one of the two bus terminals (Cotran Sur and Cotran Norte) on the east side of the highway, and express buses bound farther north for Ocotal  and Somoto  will drop you off at the nearby Shell Esquipulas.
In either case, take a cab to the central park ($0.50) to start your exploration. Estelí is quite possibly the only city in the country to name avenues (north-south) and streets (east-west), a system ignored in lieu of the tradition of counting blocks from known landmarks.
Estelí is a long city; you can cut short the walking by hopping a cab for the fixed price of $0.30–$0.60 anywhere in the city (except La Casita restaurant on the south side of town). Urbano buses ($0.25) are safe to ride and run a big loop around the city, including up and down the main avenues and nearby barrios.
You’re essentially safe in Estelí, but exercise more care here than elsewhere. In the barrios east of the highway and west of the river be especially cautious.