Desiigner -- Gun Charge Dropped

Desiigner just caught a big break ... the D.A. has dropped the felony gun charge for which he was arrested Thursday night, but he's not out of the woods.

Law enforcement tells TMZ, they cased the SUV in which the "Panda" rapper was a passenger, but found no gun. The arrest for felony possession of a loaded gun was based on what the driver of another car told cops, but the D.A. clearly felt that wasn't enough.

The D.A. has also dropped the charge of felony possession of a controlled substance with the intent to sell.

TMZ broke the story, the passengers in the SUV and the driver of the other car were involved in a road rage incident, and when cops tracked down the SUV they said they found numerous pills on the console. We're told the drugs were Oxycontin, methadone and steroids.

Desiigner is being arraigned Saturday A.M. in an NYC court. He still faces charges of possession of a controlled substance and menacing. It's unclear why the menacing charge is still on the table since it was based on him waiving a gun at the other driver.