I have a 03 yamaha vstar 1100 classic and here latley when accelerating hard in second gear the bike seems like the transmission is skipping (not slipping)... any ideas as to what in the tranny is causing this issue???

Sounds like a bent shift fork. While accelerating you can feel the power cutting in and out quickly. The problem will get worse if you keep pushing 2nd gear till it slips. You can learn where (at what RPM) it wants to jump out and start shifting before it jumps out. The long term fix is opening the transmission and fixing the bent shift fork.