  We present the discovery of a new dwarf galaxy, Hydra II, found
serendipitously within the data from the ongoing Survey of the MAgellanic
Stellar History (SMASH) conducted with the Dark Energy Camera on the Blanco 4m
Telescope. The new satellite is compact (r_h = 68 +/- 11 pc) and faint (M_V =
-4.8 +/- 0.3), but well within the realm of dwarf galaxies. The stellar
distribution of HydraII in the color-magnitude diagram is well-described by a
metal-poor ([Fe/H] = -2.2) and old (13 Gyr) isochrone and shows a distinct blue
horizontal branch, some possible red clump stars, and faint stars that are
suggestive of blue stragglers. At a heliocentric distance of 134 +/- 10 kpc,
Hydra II is located in a region of the Galactic halo that models have suggested
may host material from the leading arm of the Magellanic Stream. A comparison
with N-body simulations hints that the new dwarf galaxy could be or could have
been a satellite of the Magellanic Clouds.
