It has nothing to do with the concentration camp, only with the town where it was located; I would also say it's an SA, not an SS tinnie.
The text translates as
OF STURMBANN III/2
Sturmbann III/2 means the 3rd Sturmbann [= Battalion] of the 2nd Standarte [= Regiment].
These terms were used both by the SS and the SA, but since the 2nd SS-Standarte was headquartered at Frankfurt/Main in Hesse - which is, of course, nowhere near Dachau - this appears to refer to the 2nd SA-Standarte.
(Also, at the time in question - October 1933 - the SS guard unit at Dachau was still far from regimental size, and even much later on when it was, it was never numbered 2.)
The oval field with the spur seen at bottom center is an element of the coat-of-arms of the town of Dachau.
Last edited by HPL2008; 11-19-2011 at 09:12 PM.
OK. Thank you for the explanation