With Lexi's help, Stefan has been "sober" (non-ripper) for 20 years. Lexi figures it's about time he "makes good" with his brother, and appologises for blaming Damon for his bloodlust. Damon is happy to see his little brother, whom he misses, and proposes to go to war with Stefan. Lexi intervenes, and asks Damon not to go, because his presence will disrupt her "ripper-detox" program. Damon chooses to stay behind and give Stefan a chance to stay on the wagon.
When Stefan finds Damon, he had just turned a young woman called Charlotte. She was in love with him, that is why she asked him to turn her, so she could be with him forever. Damon soon realized that she was sired to him, when she took a joke he made literally, and killed a guy for spilling her drink.
Unconfortable with the bond, Damon found a witch who claimed she knew a spell that could break the sire bond. Her name was Valerie LaMarche, and she said to perform the ritual, they would need to sacrifice 12 human souls.
Hoping to set Charlotte free, Damon does the sacrifice.
The fact that Damon killed 12 innocent people and feels no remorse for it is the argument that Lexi uses to convince Damon that he should not go to war with Stefan.
However, the spell did not work, the sire bond was not broken. Damon tells Charlotte to count all the bricks of all the houses in New Orleans, that he will meet her at Bourbon Street, and leaves town, never to return again (until 2010).