DS has very little confidence that adults can handle this type of issue effectively. He would also loathe referring to this behavior as �bullying� any longer. Instead, he simply calls the instigator a �jerk�.
Similar to Austin�s example of physical fighting, ds will put up with nasty remarks to a point. When he decides to give it back, he gets right in their face to articulate their shortcomings for a prolonged period of time. The typical reaction is embarrassment, retreating insult and future avoidance.
If my seven year old were punched at school, I would definitely notify the administration, preferably by email so that you all have a documented account of the incident.