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This hole was a soft spot. Peeled off the outer bark and the stuff under it was rotten. Feeling up the trunk from this spot, the trunk is soft about a foot further. The tree is a yellow plum and is 2 years old. Can you tell me what's wrong with the tree and what I can do to help it.

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Not sure what's caused the problem, causes can be physical damage, cold damage or insect invasion, but stone fruit trees like plum are very prone to getting something called gummosis - whilst I can't actually see any heavy weeping going on, there does appear to be something that looks like amber coloured ooze in the area at the top of the damaged bark in your photo. If it's soft above that area too, you may need to cut it down beyond the point where it's damaged/soft in an attempt to save the tree.

Gummosis often leads to bacterial canker - that is readily recognised, because the tree will be oozing amber coloured sap and it will be maladorous. Because the tree has been damaged by something, it starts to ooze the amber coloured sap, which then gets infected by bacteria. I suggest you keep an eye on it to see if the problem worsens, when it might be best to cut it down as said above, before it spreads down the tree. Otherwise, there is a suggested course of action here https://www.gardeningknowhow.com/edible/fruits/fegen/what-is-gummosis.htm which might prevent bacterial canker setting in.

Unfortunately, there is no effective treatment for bacterial canker.

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