We broke the story ... Shifty (real name Seth Binzer) was arrested at the discount clothing store after an employee claims he witnessed Shifty grab his girlfriend by the arm during a heated argument ... and get violent with her.

When cops arrived, they searched Shifty -- and claim they found rock cocaine. The former Crazy Town singer was arrested on the scene, and subsequently charged with battery and drug possession.

Shifty pled no contest to both charges today. He was sentenced to three years probation for the drug count, and ordered to stay away from his ex for 3 years on the battery count. He was also ordered to attend 52 weeks of domestic violence counseling.

But the guy's not letting the situation get him down -- in fact, we shot Shifty this Sunday in L.A. and he's completely turning his life around ... telling us, "I'm good. I'm clean. I'm happy."