Welcome to the Forum, Craig! An inquiry was made on this HSc back in September 2010, I suspect by your Grandfather. Unfortunately, that was an older version of this Forum so it's not available for review.
You now have a very collectible Early Wartime German Navy (Kriegsmarine) HSc produced in May 1942. Depending on its condition, it could be valued at over $1,200. If the Holster is also Navy with a Manufacturer's Mark, it would increase the value even more as this would then be viewed by collectors as a "rig". The "0.549" doesn't mean anything.
For now, DO NOT STORE IT IN THE HOLSTER, as this would deteriorate the finish (bluing). Field strip and lubricate it carefully. Anything else, let me know.