Damme is located on the estuary of the Zywn (now largely silted up), at that time in the county of Flanders (now in Belgium). It was then the port of the city of Bruges.
The English knew king Philip II of France was planning to invade England, at the very least as a way of preventing an English attack on Poitou. Meanwhile, Philip was in Flanders attacking Ferrand, Count of Flanders. King John of England responded by sending a fleet to Flanders.
This fleet had 500 ships, 700 knights and their attendants, and a large force of mercenaries, under the command of William de Longespee, 3rd Earl of Salisbury. It left England on May 28, 1213, and entered the estuary of the Zywn two days later. There it found a huge French armada, 1700 ships heavily laden with supplies and the personal goods of the French barons. Most of the French army was away besieging Ghent, and so the fleet was only lightly guarded.
The English immediately attacked, seizing 300 ships which were anchored or beached outside the harbor of Damme, and pillaging and burning a hundred more. The next day they attacked the rest of the ships as well as the town itself. This was a little reckless for king Philip had come with his troops from Ghent, and the English barely got back to their ships and away safely. They returned to England with the seized ships and a large booty (the biographer of William Marshal claimed "never had so much treasure come into England since the days of King Arthur").
Not only was a good portion of the French fleet gone, but the harbor of Damme was blocked by debris, so king Philip had the rest of his fleet burned.