The engine of my 85 380sel surge from 900 to 1500 rpm in between shfting and falls back to around 900 rpm again once engaged.
Is this normal for this car. Could it be a faulty idle speed actuator ( I had it replaced recently with a second hand one as the the engine was idling around 1300 rpm then).
Would this sudden surge in RPM eventually wreck the trasmission?
Thank you if anyone can advise.

I would try changing the
 

ATF fluid and filter first. Also, take a look at the fluid level. I had this same type of thing happen recently in the Honda CRV and after changing the fluid it works like it is supposed to.
Jim
'85 300D
'95 E320
'97 CRV