It won't spread. If I'm not mistaken it's commonly caused by an injury (running in to a rock) or a dirty net. It's always a good idea to wash your nets with hot water after using them.
If left unchecked an infection inside may grow and cause the eye to burst. This could result in death.
It did take a week and a half of QT, every other day water changes, and antibiotic to clear my damsel up.
Here are some pictures of what mine use to look like. I treated him in a 1 gallon mini aquarium (with filter and light). My regular QT was in use for a new fish and the 1 was already set up. He was happy under his rock until he got better. PVC pipe helps too because it won't hurt them like a rock will.
Good luck,
Catherine