removing rust?

I think it's unlikely that you can remove the rust without damaging the Damascus. You might be able to minimize the damage by oiling the rusty spots and trying to wipe away the rust with a cloth. If that's not enough, carefully scraping the rust off with a razor blade may help.

Alternatively, you could try Evapo-Rust. It's supposed to turn the rust into something benign without damaging the steel underneath. I tried it on a razor, with limited results. I don't know if it will effect the Damascus etch, so you might want to check with the company before trying it.

For anyone who is not aware of it, the pattern in "Damascus" steel is created by forge welding layers of different steels together, then manipulating the steel in any of a myriad of ways. Once the desired pattern has been created, a blade (or other object) is shaped and finished. After the final sanding is done, the blade needs to be etched to reveal the pattern. Etching by Bladesmiths is generally done with either Ferric Chloride or Vinegar, although other chemicals will also work. If you have selected your original steels well, they will etch in contrasting shades of grey and you will get a nice pattern.

Since the pattern in Damascus is just brought out by a surface etch, that pattern will be damaged by sanding or scratching the blade. The only way to really fix a scratched Damascus blade is to re-finish and re-etch the whole blade. If the damage is in a small area, you could try re-etching that spot with etchant on a Q-tip or something, but I don't know how well it will work out. I guess it couldn't hurt (much) to try.

Here's a thread asking whether to etch Damascus with Ferric Chloride or Muriatic Acid. (FYI, "fitzo" is a retired Chemist, so he knows what he's talking about, particularly when it comes to chemicals.)