Pictures, please.

Here's a photo of the plant

Here are the worms. The picture is blurry as you can see. They are really, really tiny. Whenever I water I see hundreds of these. I had some tiny bugs in my house near the window that is above this plant. Called an exterminator and was told they were beetles and that these tiny worms are what the beetles matured from.

Ornamental grasses are not much bothered by many insect pests. But as grasses, they can be susceptible to the same insect issues that turf grasses (lawns) are prone to, namely various grubs and larvae. These feed off the roots and can cause stunting or poor growth.

I can't see the grubs clearly enough to determine exactly what they are but if you have Japanese beetles in your area, I certainly consider treating for those. Or you can just try a general application of something like GrubEx in that area, which addresses various types of soil grubs and larvae.

It would help to have a firm identification of the critters. Take some samples to your county's Extension Service office.

Find that office here:

http://npic.orst.edu/pest/countyext.htm