HELP!!!!!! Does my horse have scratches?? sorry it's long!! :)?

My barefoot, 5 year old, belgian/quarter horse mare has recently gotten a sc on her back right fetlock. To me, it just looked like a simple little sc that she may have gotten from stepping on a rock. She lives in Bolton, CT and just recently we got about 3 to 4 inches of rain after a long drought over the summer. Which also means, A LOT OF MUD! Me, being 14, and a horse owner since August 13, 2010 I do not know much about cuts and fungi. Though I have gotten help from MANY people in the barn I have yet to make a decision on what she has. I was given Biozide Gel from a horse friend and she said it's great with healing cuts. My instructor gave me Desitine, and she said it was great for scratches. The first day I discovered this little imperfection it was just red and oozing a bit, there was heat coming from the front of the ankle joint and continued to get hotter towards the back of the joint, she never went lame. I made sure to keep it clean and very medicated. It's been about a week now, and the redness has turned into brown scabs, most, if not all heat has disappeared. But, I see a little yellowish circle under the cut, my instructor said it was scratches, though many others said it was just a cut... I'm so confused, I don't know what it is, it's almost better and the heat is gone but, what does it sound like it is to you?