  We study the impact of baryons on the distribution of dark matter in a Milky
Way-size halo by comparing a high-resolution, moving-mesh cosmological
simulation with its dark matter-only counterpart. We identify three main
processes related to baryons -- adiabatic contraction, tidal disruption and
reionization -- which jointly shape the dark matter distribution in both the
main halo and its subhalos. The relative effect of each baryonic process
depends strongly on the subhalo mass. For massive subhalos with maximum
circular velocity $v_{\rm max} > 35 km/s$, adiabatic contraction increases the
dark matter concentration, making these halos less susceptible to tidal
disruption. For low-mass subhalos with $v_{\rm max} < 20 km/s$, reionization
effectively reduces their mass on average by $\approx$ 30% and $v_{\rm max}$ by
$\approx$ 20%. For intermediate subhalos with $20 km/s < v_{\rm max} < 35
km/s$, which share a similar mass range as the classical dwarf spheroidals,
strong tidal truncation induced by the main galaxy reduces their $v_{\rm max}$.
Moreover, the stellar disk of the main galaxy effectively depletes subhalos
near the central region. As a combined result of reionization and increased
tidal disruption, the total number of low-mass subhalos in the hydrodynamic
simulation is nearly halved compared to that of the $\textit{N-}$body
simulation. We do not find dark matter cores in dwarf galaxies, unlike previous
studies that employed bursty feedback-driven outflows. The substantial impact
of baryons on the abundance and internal structure of subhalos suggests that
galaxy formation and evolution models based on $\textit{N}$-body simulations
should include these physical processes as major components.
