ANY ammonia is dangerous for fish! I take it you added the damsels to start your cycle instead of doing a fishless cycle (see link in my sig).
You need to let the cycle complete, then do a large (25% -30%) partial water change (PWC
). Continue to monitor the water parameters for a week. When you go a week with feeding the tank and have ZERO ammonia, ZERO nitrite and <5ppm nitrate you can start adding corals and inverts.
If you want SPS
corals you need to also make sure that Phosphate is <.01 and nitrates are closer to ZERO if not 0.