red flatworms

I've had an infestation of red worms. They are a pest, but I don't think they are toxic. The dottyback is likely affected by something other than the red worms. Red worms are a sign of extra nutrients in the tank. They will eventually die out as you do water changes and get the nutrients under control. My infestation was very annoying, but eventually passed over time.

 

Planaria i.e. flatworms is what you probably have, non-toxic, regenerate like crazy. The problems start when when said flatworms start dying off, its a major PITA. Your Lined and other wrasses will keep them in check once you get rid of the majority of them. Nuke'em, and start cleaning them out, i.e. fine mesh net, siphon, if you have a sump be sure to have a strainer to catch wjats coming thru the over flow.

 

I like to look at them as free fish food.

Get a six-line and/or yellow damsel and they will be fat and happy.

 

melev's reef had a nice little DIY on getting rid of them. Basically, siphon out as many as you can before using the flatworm exit, then follow the directions on the package. Have water ready to do a water change afterwards.

 

I had to deal with those the past and FWE works pretty well. Seems like most people use a higher dose than listed on the box, and I did as well. My nassarius snails went crazy, but otherwise little else was affected. I would recommend being ready to do a water change as well afterwards. I agree too that siphoning or rinsing the rock to remove as many as possible first is a good idea. That limits the amount that die in the tank.