Damadam or Damadamm basically was a set of words from the popular Sufi song, Damadam mast Kalandar. The word, made from the root word dum, which means breath, literally means in every breath.
The movie Damadamm though takes the popularity of the title damadam mast kalandar into account and makes one feel that it means 'fun' as Masti means fun or intoxication, mast kalandar is generally used for someone who enjoys himself a lot, free from sorrows and tensions of the world, and damadam mast kalandar is a very, very common phrase. So much so that when you say damadamm, the next words are mast kalandar. And hence, the title.