Yes, it is the Factory Reset.
Settingsd --> Privacy --> Factory data reset
This will erase all of the apps and data but does not touch the ROM and kernel. IOW, when you do this, all apps (other than the ones that were isntalled in the ROM itself) get erased, all of their data gets erased, all of you accout info gets erased - it's like your Mom getting the phone from VZW, only with CM installed instead of the stock Android ROM.