Damon: I like you better like this. Period look, it… didn’t suit you.
Elena: Is that an insult?
Damon: Actually Elena, it is a compliment of the highest order.
Elena: Look, o know Stefan is worried about our… friendship.
Damon: Did he mention that to you too?
Elena: No, did he mention something to you?
Damon: No, nothing worth repeating.
Elena: So, I think you should stop with the flirty little comments and that eye thing that you do.
Damon (smiling): What eye thing?
(1x22 “Founder’s Day”)

They were so flirting with each other! It was so obvious! And I love the way Damon and Elena are looking at each other in this scene. It’s not the kind of “glances” that friends share. And we know that Damon likes to flirt with her and doing his “eye-thing”, but it’s a bit surprising (not really) seeing Elena respond to that. She does this little smile and she looks at him in a flirty and flattering way when he says that it was a compliment of the highest order. I think their glances say a lot more than words.