They are in an old coke bottle that I washed thoroughlly, cut and put plenty of air holes in and then placed in the main tank...we have done water tests and they say the water is fine.
Is the water circulating properly through the holes? How about the tank temperature?
What are you feeding them?
In my experience fry problems are more commonly down to water quality and feeding and a bit more rarely down to illness on its own. Though, I have had some unlucky batches where they did clamp up and die.
How long has your tank been running? When people say they are doing what their LFS said it often makes me cringe since LFS have a habit of giving bad advice.