At the Ames Manufacturing Company there was an individual named Daniel Reynolds (initials DR) which was responsible for inspecting a substantial amount (if not all) of the model M1860 cutlasses produced. And his initials are typically sometimes found on the pommel and most always on the ricasso of the M1860 cutlass.
Each M1860 Naval Cutlass has a serial number stamped on the inside quillion. At the written request of the US Navy the Ames Company stamped a serial number on each and every cutlass. This serial number will always be found on the inside of the quillion (or guard) as shown in your image. This serial number consists of 2 digits and an M on the first line and 3 digits on the line below. The top number represents thousands and the bottom number represents hundreds. The letter M always represents a 1000 within a numerical context while the letter K represents 100's.
In August 1861, the Navy requested Ames stamp serial numbers on the guard and
scabbard of each future cutlass produced, using "M" to designate 1000, e.g. cutlass 12,345 would be marked "12M/345". Since 600 cutlasses had already been delivered, Ames started such numbering at 601; those cutlasses already delivered were to be retro-marked by the Navy. These numbers are often erroneously referred to in ads and discussions as "rack numbers", but in fact they are, as noted, serial numbers. Serial numbers do not always appear on the scabbards, but when they do they are stamped on the obverse of the scabbard just above the frog knob using the same format as on the guard. It is obvious that the scabbard were frequently interchanged since few if any are found with cutlasses and scabbards with matching serial numbers.
There are a couple of issues related to these serial numbers. First, Ames received contracts from the Navy for a total of 25,000 M1861 cutlasses, and, based on Bureau of Naval Ordinance records, delivered approximately 22,000 of them during the course of the Civil War. However cutlasses are found with serial numbers well above 25,000. The simplest explanation, of course, is that Ames just delivered more cutlasses than currently-known Bureau of Naval Ordinance records would imply. It is also possible that Ames applied the serial numbers before the cutlasses were inspected and accepted by the Navy and that about 3000 serial numbered cutlasses were rejected. This would explain why serial numbers are found in excess of 25,000 when only 22,000 cutlasses were purchased.