Add soft smokes around by creating white random shapes using Marquee tool then go to Filter > Blur > Gaussian Blur. Your smoke will not look like mine so no settings will be provided, adjust your own settings to fit your own work.
Opacity level should be low so the shape is transparent. Settings in this tutorial is 34%.
Step six:
More tiny smokes added.
Step seven:
Now onto the dog tags. Create a new layer and draw a small white circle.
Duplicate the circle layer design from step seven then make a new layer and merge them both. Now resize the circle design by a little and position as shown below.
Pretty neat effect, thanks