B737-800 CREW AND UNIDENTED ACFT IN HOLDING PATTERN HAD LESS THAN LEGAL SEPARATION IN ZDC CLASS E.

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HOLDING AT ARD ON THE DYLIN ARR TO EWR AT 10000 FT; WE WERE CLRED TO 8000 FT. AT 9500 FT; WE NOTED AN ACFT ONLY 500 FT BELOW US ON TCASII; AND ASKED THE CTLR ABOUT HIM. HE SEEMED A LITTLE CONFUSED AND ASKED US TO MAINTAIN 9000 FT INITIALLY; BUT THEN HAD US CLB BACK TO 10000 FT AND THE OTHER ACFT DSND TO 8000 FT. I THINK THE CTLR MUST HAVE MISTAKENLY CLRED US TO 8000 FT INITIALLY; INSTEAD OF THE OTHER ACFT. THE CTLR MADE A COUPLE OF CALLS TO BOTH ACFT TO ASCERTAIN THEIR ALTS/IDENT. WE PROBABLY WERE WITHIN APPROX 1 MI OF EACH OTHER AT VIRTUALLY THE SAME ALT AT OUR CLOSEST POINT OF APCH. WE NEVER GOT A TCASII ALERT. I LATER CONFIRMED TCASII WAS IN TA/RA MODE. FACTORS: WE WERE VIRTUALLY ON TOP OF THE OTHER ACFT IN THE HOLDING PATTERN; WHICH MAY HAVE LED THE CTLR TO CONFUSE OUR CALL SIGN. AS WE STEPPED DOWN IN ALT IN THE HOLDING PATTERN; I HAD RPTED OUT OF THE ALT TO THE NEW ALT; IE...LEAVING 11000 FT FOR 10000 FT. THIS TIME I SAID; '...DSNDING TO 8000 FT.' HAD I SAID OUT OF 10000 FT FOR 8000 FT; IT MAY HAVE ALERTED THE CTLR TO THE ERROR. WE COMPLIED WITH THE CLRNC TO DSND AND THEN MAINTAIN 9000 FT DESPITE SEEING THE OTHER ACFT ON TCASII; BECAUSE WE ASSUMED THE CTLR UNDERSTOOD THE SIT; AND MAYBE THE OTHER ACFT WAS HEADING AWAY OR SLOW TO DSND OUT OF 9000 FT. WE NEVER GOT A TCASII ALERT; AND SO; NEVER FELT A SENSE OF URGENCY. IN RETROSPECT; I FEEL I SHOULD HAVE HAD MY COPLT (PF) AGGRESSIVELY STOP THE DSCNT AT 9500 FT UNTIL THE SIT WAS RESOLVED.