Domestic animals eating small bugs (5)
I believe the answer is:
pests
'bugs' is the definition.
'domestic animals eating small' is the wordplay.
'domestic animals' becomes 'pets' (I've seen this before).
'eating' is an insertion indicator.
'small' becomes 's' (abbreviation - e.g. clothes size).
'pets' going around 's' is 'PESTS'.
(Other definitions for pests that I've seen before include "Persistently annoying persons" , "Take steps to troublesome animal." , "Steps taken about nuisances" , "Steps (anag.)" .)