Ok. with Mistrust BFC in play if I have Cyclops Vet Attack Havok Vet
with a close combat attack does Havoks Defense go down by -1?

BFC: Mistrust

When characters that have the same team symbol or team ability are adjacent to each other, modify their defense values by –1, to a maximum of –1.

Unless you are using the Ultimate Cyclops, then yes. Both have the same team symbol, and they are in adjacent squares, so Mistrust activates.

If havok in the same analogy is being "defended" by another character would the -1 still aplly or would that alter his orginal defense value and not the replaced one. In other words which applys first, the defend power or the bfc?

BFCs are continously active.

Defend activates just before the attack roll. Basically, when the attack is declared.

Mistrust decreases Havok's normal defense value by 1.
An attack from Cyclops against Havok is declared.
The character with Defend that is adjacent to Havok has its Defend activated. Havok gains the Defending character's defense value.
Mistrust, again, decreases Havok's replacement defense value by 1.
The attack roll is made against the modified replacement defense value.

Generally speaking, the rule of thumb is to 'replace, then modify'. So in the scenario you describe (as Defend would be a replacement value), you would replace Havok's DV with the Defend-ed value, then subtract the one from that (for Mistrust). Make sense?
Hope that helps!
-jason

EDIT - Trumped by Speedster (who also answered 'better')! Good call there, sir!

Woot, woot!