The Mandraki was the military harbour and was guarded by a tower built between 1464 and 1467 by the Grand Master Zacosta at the end of the natural mole. After the siege of Rhodes in 1480 the Grand Master d'Aubusson added a bastion around the tower transforming it into a guard fortress on the sea.
The castle was built at the place of an old Byzantine church dedicated to St. Nicholas, hence the name. Since the 17th century, a lighthouse was added at the top.
The first written record of church in Danmark locality date back to the year 1291. Close to the church are several stones with a Christian text and cross inscribed. The oldest parts of the present red-brick church are from the 1300s. In the late 1400s the church was enlarged to the appearance it has today. The church has been modified both internally and externally several times, among other things after the fires in 1699 and 1889. There are lot of well-preserved mural paintings in the walls.