Q: My 7′ yaupon holly has been getting these weird things for two years now. They stunt the growth by taking over the new leaves.

When you cut open the “pod”, there are tiny little light green bugs inside, like aphids, only smaller. What are they, and how can we get rid of them?

A: You are seeing yaupon psyllid galls. The swollen leaves are caused by a tiny insect, called a psyllid, which lays eggs on young leaves, causing them to swell and cup upwards. Inside this protected space, the psyllids can mature out of sight of predators.

The best control is pruning out affected plant parts when seen each spring to disrupt the insect life cycle.

You might get some control by using imidacloprid (Bayer Tree & Shrub, Bonide Systemic Granules, etc) insecticidal drench in fall

see
http://insects.tamu.edu/fieldguide/aimg95.html