I see what you are talking about. The only thing I could think of error-wise would be a dropped letter, possibly from "Pluribus" on the reverse. However, I am pretty sure dropped letters are incuse. Based on your image it looks neither incuse or raised. My guess is that it just wear that happens to look like an "S". If you squint your eyes, tilt your head 45 degrees to the left, and stand on one foot, you can pretty much see whatever you want on the face of a coin
A damaged coin is almost always worth face value (unless it is a novelty or a counterstamp, but that is not the case with your coin).
PMD stands for post-mint damage. Basically, this mark was caused after the coin had enter circulation and is considered damage to the coin. The value of the coin is one cent.