DCFS letters use two words: indicated, which means the investigator found credible evidence of abuse or neglect, and unfounded, which means there was not enough evidence to support the allegation. The letter does not say the report was true or false.
An unfounded finding means DCFS will not proceed. It does not stop the police from investigating, and it does not stop the State's Attorney from filing criminal charges based on the same incident.
If you were indicated, you have the right to appeal. An indicated finding is not the end of the world — in many cases DCFS simply puts a safety plan in place — but the finding stays in the record until it is successfully challenged.