Dance record on vacation creates division (7)
I believe the answer is:
discord
'division' is the definition.
(thesaurus)
'dance record on vacation' is the wordplay.
'dance' becomes 'disco' (disco can mean a dance event).
'on vacation' says to hollow out the word (remove centre letters) (after the inside letters have vacated the word).
'record' with its middle taken out is 'rd'.
'disco'+'rd'='DISCORD'
'creates' is the link.
(Other definitions for discord that I've seen before include "Friction" , "Opposition" , "Strife, lack of harmony" , "cacophony" , "contention" .)