Rust?

Is this rust or has the finish coming off?

Little bit of both maybe

Rust is my guess. Does it feel rough?

Sand it down with some fine grit sand paper then get a blueing kit. Little rust is no big deal and easy to fix.

Looks like it's rusting where the finish came off. I agree with GTT - sand with some fine grit sandpaper or fine steel wool and then re-blue with a cold blue kit.

IMO, fine steel wool works best because it removes more rust and less metal.

I agree. And I'll usually put some solvent or WD-40 on it also for a quick soak before using the abrasive. Both can help to loosen rust.

Use fine steel wool saturated with oil, I use REM oil. If it is rust only it will come right off. But as stated above it looks like rust where the finish has come off. Clean it up and if it is bare metal re blue. I have had good luck with birchwood Casey perma blue. Follow the directions and repeat until the finish is where you want it. Then saturate in in oil and let cure the for a few days, applying more oil every day.

Agree with the above. Using the birchwood Casey perma blue what I have found works well is clean as above with steel wool and oil then wash completely to degrease with birchwood Casey gun scrubber. After that apply the perma blue until happy with the results usually a few coats then coat well with Corrosion-X to stop the blueing process and protect it. after 10 minutes wipe off the excess Corrosion-X and you are done.