DAMAGE is one of the Stats in Blacklight: Retribution that affect the performance of your weapon. Damage tells you, how much Health an opponent will lose when being hit by one of your bullets. Therefore, Damage is somewhat the opposite Stat of Health.
Damage always shows the base value per bullet. It does not display bonus damage you may be causing through a headshot or by using Incendiary Ammunition. It will also not display the lower Damage for other special Ammunition types. For weapons that fire a burst of three bullets (Burstfire Rifle, Burstfire Pistol, etc.), the value that you see is also for just one bullet. Provided that all 3 bullets of a burst are on target, your actual damage should be 3 times of what you are shown.
For the Shotgun and the Shotgun AR-k, one shot contains multiple pellets. The Damage displayed for those weapons is the damage per pellet.