  We study SU(N) Yang-Mills-Chern-Simons theory in the presence of defects that
shift the Chern-Simons level from a holographic point of view by embedding the
system in string theory. The model is a D3-D7 system in Type IIB string theory,
whose gravity dual is given by the AdS soliton background with probe D7-branes
attaching to the AdS boundary along the defects. We holographically renormalize
the free energy of the defect system with sources, from which we obtain the
correlation functions for certain operators naturally associated to these
defects. We find interesting phase transitions when the separation of the
defects as well as the temperature are varied. We also discuss some
implications for the Fractional Quantum Hall Effect and for two-dimensional
QCD.
