No matter what you see in that coin, it didn't come from the mint in that condition, it's circulation damage. It probably spent some time bouncing around a parking lot.
If you'd like to learn about error coins, try these sites to start. http://www.lincolncentresource.com/ http://coppercoins.com/ http://varietyvista.com/CONECA Master Listings.htm
When you see a coin like this, Sassy, the most obvious answer is almost always the correct one... damage. It'll take a little time for it all to start making sense, and there's nothing wrong with asking questions though.
