Personally..If I were in your situation. I wouldn't want my daughter alone with this man. Not because of worrying he might hurt her..but rather do you trust his judgement in who he might bring your daughter around to meet?... As far as his girl on the side...even if they do get back together..is she the kind of person you want your daughter around?? I mean she sent you a pic of her and your baby's daddy in bed! Yes I know you sent one back...but it doesn't sound like she had good intentions! I mean if she was worried he was cheating on her with you...then why wouldn't she just ask you?...sending that pic..seems to me that whether or not she was aware that you and him were still "together in some way or another and she wanted to rub your nose in the fact that he was with her now. That's the trashy equivalent to territorial marking. You trumped her and she kicks him out?...the pic you sent back could have been from any time..sounds like this girl just wants DRAMA!
Idk your age, not that it matters, but this is similar to a situation I was in when I was in my early twenties...it was an awful situation and ended very very badly. My advice to you...protect yourself and your daughter. Cut ties with him as much as possible. Go to court get request full custody if you don't already have it (some states children born out of wedlock are considered full custody of the mother..but everywhere laws,are different.) Research the laws. Ask for an advocate. File for child support thru the DOR and talk to an advocate about options regarding custody/visitation rights. If you don't trust him then you can't trust the people or situations he might bring your daughter in to...ask for supervised visits..either at a trusted 3rd party's home, someone who you are both comfortable with and is willing to take on the responsibility. If there is no one or the two of you can't come to an agreement..then either a community center or other child oriented public place that he is to remain at for the duration of visits..or all else fails there's always court appointed visitation centers..tho I would try to avoid them if possible...If he breaks the rules or lies or your daughter starts telling you that he is bring her to others houses or anything not in the agreement. Document everything! Late pick ups drop offs no calls last minute changes no shows and anything that just seems off.

I know I sound overly harsh...but, going forward what kind of role models do you want for your daughter? And who, besides yourself, do you trust to act in this capacity?
Be Safe Be Well and Keep Writing!
P.s. if you want to talk more in depth about any of this please feel free to pm me. I'll be willing to share more details of my experiences as well.