Joe,
Does its tail have any abnormal white edges or bloody streaks, or is it fuzzy or slimy-looking at all? Usually, fin rot has at least one of these symptoms in addition to missing chunks. Fantails and other fancies are prone to tail fungus (I think it's actually a bacterial infection that just looks like a fungus, but who's counting?...), so it is quite possible.
What size is the "u-shape"? Wouldn't be the size of the other fish's mouth, by any chance? This is another possibility...
In either case, melafix is a good thing for this sort of injury/disease. Add the recommended amount to your tank, and it will keep down infection, as well as soothe the injured area. If you have identified it as fungus (another good benchmark is that the missing area gets bigger every time you look in the tank...), adding salt would be the next action I would take. You have a 10 gallon, right? put 2 big tablespoons full of aquarium salt in. Hopefully you've caught it quickly enough to not have to put too much medication in the tank.
If it turns out to not be tail rot, the melafix and salt won't hurt your fish, so don't worry about it.