Challah, Chapter 2, Mishnah 2. The Mishnah opens with the case of "Afar chutz la'aretz sheba bisfinah la'aretz" - soil that originated outside of Eretz Yisrael and is now sitting in a ship that is in Eretz Yisrael, and produce that grew in that soil: "chayeves bema'asros u'vashevi'is" - the produce that grows from these plants, growing in soil from outside the Land but inside a ship floating on a waterway in Eretz Yisrael, is obligated in tithes and is likewise subject to the laws of Shemittah.
Why challah is not mentioned here:
The obligation of challah is not relevant to this discussion, because as we learned in the previous Mishnah, even grain that grew outside of Eretz Yisrael and was kneaded into dough in Eretz Yisrael is obligated. How much more so here, where the growing itself took place in Eretz Yisrael and only the soil was brought from outside the Land; obviously the obligation of challah applies here regardless of this question.
The qualification of the commentators:
The idea that things growing inside a ship in Eretz Yisrael are considered as growing in the Land, even though the soil came from outside Eretz Yisrael, is qualified by the commentators: we are speaking about a ship that has a hole in it. And how does it stay afloat? The hole is plugged with clods of earth, lumps of soil that keep it floating. And since the material plugging the hole is soil, as is the soil inside the ship in which the plants grow, everything is connected, and therefore it is as though it grew in Eretz Yisrael itself.
The view of Rabbi Yehudah:
Rabbi Yehudah comes and says: "Eimasai? Bizman shehasefinah goshesses" - this is true only as long as the ship itself is dragging along the riverbed. Then there is a direct connection between the riverbed and the soil in the ship, even though it was brought from outside the Land, by way of the clods of earth blocking the holes. Only under these circumstances is the produce considered obligated in tithes and subject to Shemittah.
"Isah shenilushah b'mei peiros":
From here the Mishnah moves to another matter, one that bears directly on challah: dough that was kneaded not with water but with fruit juices. What is unique about fruit juices is that they do not enable whatever they come into contact with to become susceptible to tumah, unlike water. Even so, they do have the ability to bind the particles of flour together, and therefore the dough is obligated in challah.
It is interesting to note that in the Yerushalmi there are indications that we do not rule this way, and that dough kneaded with fruit juices alone is exempt from challah. Therefore it is proper not to knead with fruit juices alone, since doing so may leave the dough in a state of doubt and uncertainty as to whether it is obligated in challah or not.
A further practical difference - eating with impure hands:
Another point regarding dough kneaded with fruit juices and no water: it may be eaten with hands that are tamei, even when one does not want it to become tamei or when it may not become tamei given its status. The reason is that since it never came into contact with water, it cannot become tamei. This is one of the rules of tumah as it applies to food, the laws of machshirin: the food must come into contact with water in order to be made susceptible to tumah. And since this dough came into contact only with fruit juices, it may be eaten with impure hands and it will not become tamei.