Hot loader issue

webpack.config.js

/* global process */
/* global __dirname */
'use strict';

var ExtractTextPlugin = require("extract-text-webpack-plugin");
var webpack = require('webpack');

var environment = {
  ENV: JSON.stringify(process.env.ENV || "local"),
  URI: JSON.stringify(process.env.URI || "http://production.com")
};

/*
 * Production Settings
 */
var preLoaders = [];
var app = ['./js/app.js'];

var plugins = [
  new ExtractTextPlugin("main.css", {
    allChunks: true
  }),
  new webpack.NoErrorsPlugin(),
  new webpack.DefinePlugin(environment),
  new webpack.optimize.UglifyJsPlugin({
    sourceMap: false,
    compress: { warnings: false }
  }),
];

/*
 * Development Settings
 */
if (JSON.parse(environment.ENV) === "local") {
  app = [
  //  'webpack-dev-server/client?http://0.0.0.0:8080',
  //  'webpack/hot/only-dev-server',
    './js/app.js'
  ];

  preLoaders = [
    {
      test: /\.js$/, // include .js files
      exclude: /node_modules/, // exclude any and all files in the node_modules folder
      loader: "jsxhint-loader"
    }
  ];

  plugins = [
    new ExtractTextPlugin("main.css", {
      allChunks: true
    }),
    new webpack.NoErrorsPlugin(),
    new webpack.DefinePlugin(environment),
  ];
}


module.exports = {
  entry: {
    app:  app
  },
  output: {
    path: __dirname + '/build',
    filename: 'bundle.js'
  },
  devtool: 'inline-source-map',
  module: {
    preLoaders: preLoaders,
    loaders: [
      {
        test: /\.js$/,
        exclude: /node_modules/,
        loader: 'babel-loader?experimental&optional=selfContained'
      },
      {
        test: /\.js$/,
        loaders: ['babel'],
        exclude: /node_modules/
      },
      {
        test: /\.scss$/,
        loader: 'style-loader!css-loader!sass-loader'
      },
      {
        test: /\.css$/,
        loader: 'style-loader!css-loader'
      }, {
      test: /\.(png|jpg)$/,
      loader: 'url-loader?limit=8192'
      }, // inline base64 URLs for <=8k images, direct URLs for the rest

      // Font handlers
      {
        test: /\.woff$/,
        loader: "url-loader?limit=10000&minetype=application/font-woff"
      },
      {
        test: /\.ttf$/,
        loader: "file-loader"
      },
      {
        test: /\.eot$/,
        loader: "file-loader"
      },
      {
        test: /\.svg$/,
        loader: "file-loader"
      }
    ]
  },
  plugins: plugins
};

Using webpack-dev-server --hot --inline --colors as my watcher/npm start