Diamond in the rough is a phrase or an idiom that is used in the English language. It is used to refer to a person as having good character and qualities and the potential of becoming great but lacking any sort of refinement and polish. It is rarely used to refer to mean something valuable having been found in an unexpected or out of place location. As an expression it describes a grey section of society where a person may not himself commit crime but may know those who do. It refers to a person who has all the goodness in him much like an uncut diamond but lacks the polish and finishing that a final diamond has. The phrase is a metaphor of a diamond that is uncut and that needs to be polished and cut to become perfect.
The phrase is "A diamond in the ROUGH." It comes from the fact that when diamonds are newly mined - that is, before they have been cut and polished - they don't shine, in fact they look quite a lot like pebbles and are easily overlooked in their "rough" state.
From this comes the idea that a person can also be like a diamond in the rough or, in the more common idiom, "a rough diamond." This means a person who has rough, uncultivated or even impolite manners, but at heart is a very good person with excellent qualities. So if you described someone as a rough diamond, you would basically be paying them a compliment as you mean that they are a good person underneath - but you are also saying that their outward style and behaviour isn't very attractive - and that isn't such a compliment!
From this comes the idea that a person can also be like a diamond in the rough or, in the more common idiom, "a rough diamond." This means a person who has rough, uncultivated or even impolite manners, but at heart is a very good person with excellent qualities. So if you described someone as a rough diamond, you would basically be paying them a compliment as you mean that they are a good person underneath - but you are also saying that their outward style and behaviour isn't very attractive - and that isn't such a compliment!
I disagree that it isn't such a compliment! I believe it means you are undiscovered! You have been hiding in the miners dark cave and now someone has found you.