The club began its life with the name, Esteghlal Rasht. They spent a number of seasons in the lower leagues of Iranian football but made it back to the top level, finishing 10th in the 2000–01 season. The next season proved to be disastrous for the team, they were managed by Nasser Hejazi, but finished 13th in the standings. They were relegated and embarrassingly lost 9–2 to Aboomoslem on the last match day of the season. The following season Pegah Dairy Co. bought the team, making it one of the few privately owned football clubs in Iran. The popular club was named as Pegah Gilan.They won promotion again that season and went back to the IPL. They stayed in the IPL for two seasons but were relegated again in the 2004–05 season. Despite finishing first in Group A standings in the Azadegan league during the 2005–06 season, they were eliminated in the playoff stage and missed out on promotion.
In October 2008 Pegah terminated their sports activities due to financial problems. Damash Iranian (Damash Mineral Water Company) owned by Amir Abedini took over their license. The club was named Damash Gilan.