SAN DIEGO (KGTV) - An argument over a military uniform sparked an altercation that led to the stabbing of an Army serviceman in the Gaslamp Quarter Thursday night.

According to San Diego police, the incident happened at about 11:40 p.m. in the 600 block of 5th Avenue.

Witnesses told 10News a man was wearing what appeared to be a Class A Army uniform at a bar when he was approached by an active-duty Army serviceman and a military veteran who pointed out some errors on the uniform. According to the two men, the uniform was missing a patch and the rank was upside down, leading them to question if it was a "stolen valor" situation.

However, when the men pointed out the uniform issue, the uniformed man -- later identified by police as 42-year-old Marc Dominguez -- reportedly became angry, brandished a knife and threatened the two men.

"The guy got extremely hostile and pulled out his knife twice on us. We told him, 'If you're going to threaten us, come out here and threaten us like a man,'" said Army veteran Edward Villalobos, whose friend is active duty.

The confrontation turned violent, and police said Villalobos' friend was stabbed multiple times before others intervened.

A pedicab driver witnessed the incident and flagged down a police officer, who arrested Domignuez. The serviceman's injuries did not appear to be serious and no other injuries were reported in the melee, 10News learned.

Army Staff Sgt. Robert Paladino told 10News he saw the same man in the same uniform two weeks earlier.

Paladino said, "I confronted him. I asked him, 'Hey, are you in the military?' Maybe he was an actor, maybe it was Halloween … Then, he came out and told me, "Yeah, I'm a soldier in the Army.'"

According to Paladino, the man was wearing was an Army uniform with a Marine cap and the braid was on the wrong side.

"I was in the Army for 7 years. When you're in for that long, you can tell instantly when something is out of place like that," Paladino said. "He just rolled with it and lied to my face … that was completely disgusting," Paladino added.

Ahead of Veterans Day, Paladino said he's glad the man is in police custody.

"Civilians around here, they treat military with a lot of respect, so when someone takes advantage of that and uses it for their own advantage, it bothers me," Paladino told 10News.

It has not been confirmed if Dominguez is currently in the Army or an Army veteran.