Small red spot on chest right side in between pectoral muscles hurts to touch what can it be ?

Infection: An infection. Please go to the doctor to get it diagnosed and treated.

Be conservative: It might be as simple as a pimple. Put a bandaid over it to protect it from your fingers. See what happens. Sometimes, in diabetics, small infections can become large ones and need antibiotics or drainage. At this moment, with your description, let's wait