The present TESLA damping ring is designed for a normalized horizontal emit
tance of 8 x 10(-6) m. gamma-gamma collisions at the TESLA linear collider
will benefit from a further decrease of the horizontal emittance. This pape
r reviews the processes which limit the horizontal emittance in the damping
ring. Preliminary estimates on the smallest horizontal emittance for the p
resent TESLA damping ring design as well as an ultimate limit of the emitta
nce reachable with the TESLA damping ring concept will be given. (C) 2001 E
lsevier Science B.V. All rights reserved.