"Don't play stupid with me, Buffy. You might like to disassociate me from soulboy-- which, hey, no complains here-- but you forget that I remember what he remembers. We both know better about what's going on with Damon. Or, maybe I know a little better and you're still slow on the uptake. Must be the blonde."

He knows a little better alright. He knows that Damon's a vampire, but he's not going to tell her. Why? Because he thinks it'll be hilarious when that cat comes out of the bag.