If I have an undead unit in play with 1 power and 2 hp, declare it as a defender against an attack with 10 damage and play Ghostly Apparition. What happens?

Does the opponent only need to assign 2 damage to my unit and proceed to apply 8 dmg to may capital?

He must assign enough to destroy your unit first, but he can't (just like with Swordmasters) so 10 damage is wasted.

Thank you!