  We study the prototype of fractional D3 branes at non-isolated singularities
in gauge/gravity duality at the nonperturbative level. We embed the quantum
moduli space of N=2 SU(M) pure SYM, the gauge theory on fractional D3 branes at
the A_1 singularity, into that of the cascading quiver gauge theory on regular
and fractional D3 branes at the same singularity, for which a gravity dual
description exists. We deduce a simple analytic expression for the exact
twisted sector fields in the type IIB string dual, which encodes the full
quantum dynamics of the gauge theory. Nonperturbative effects in the gauge
theory translate into the transmutation of fractional D3 branes into twisted
sector fluxes.
