Defects, Issue and Bug are terms which are often used interchangeably but what is the difference between the 3? One way to distinguish them is using the following definitions (some teams may use different definitions and that is OK as long as they are consistent!).
A defect is any case when there is a variance between the expected and actual results.
An issue is a problem that occurred during the sprint before the Definition of Done for the user story has been met. An issue will typically be fixed within the same sprint.
A bug is typically caught by end users after a release when the story has been completed and delivered or at least accepted by the PO. A bug may have its own PBI and it is typically fixed in subsequent sprint than the sprint in which the story was delivered. Bugs are evaluated for their urgency, criticality and severity as they are escaped defects.