Nice. You're right about what it is. It's from the Republic of Texas (pre Civil War), listed as Albert's SU 387 and is said to be very rare. Great find!
(pardon my duplication of this post from the thread about this item in What Is It)
That is a great button! I have a friend in Texas who has a large collection of Republic of Texas buttons and he told me those buttons retail for $2500 to $3000. I voted banner then realized you found it 5 or 6 years ago, which I believe would disqualify it.