Criminal Law Questions? Ask a Criminal Lawyer.
You can be indicted for a crime without ever being arrested. This means the grand jury issues an indicted. To be officially charged with the crime, you would be arrested for it in order to be able to defend your rights.
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If you had been officially charged, the charges would not have been dropped but rather you would have had to go to Court. You obviously didn't have to do this, thus no charges were actually filed, merely an investigation or police report was done. There is a difference in being officially charged and having a police report filed against you.
If you were not read your rights, taken in and booked, you were not arrested. This would need to be removed from your record. I would suggest contacting the prosecuting attorney and explaining to him/her the situation so that the arrest record could be taken off of your record.
Hope this helps.