but I have no idea why this was done. Found CRH, the coin weighs 2.04g, so about 90% of normal. The entire circumference has been ground out between the faces. Considering this is a very worn, even ugly little coin I can't imagine it was ever mounted in any sort of bezel or used as jewelry or in a display. Some things just make you go, why?
It's environmental exposure toning damage to the Cupronickel clad and harsh chemical errosion to the copper center. The errosion will wear down the edge and have the appearance of your Dime. By the way. Even though your coin is damaged. Never use metal tweezers to hold coins! One day you might a true mint error and accidentally damage the surface.