That's correct. You submit a Form 1 with the tax, get it approved by the BATFE, and then construct your suppressor. Make sure you have the approved Form 1 in hand before you start any work. You can go here
http://www.silencertests.com/
and search for more info from people who have done it.
Just curious, why do you want to make your own? From what I've read, most people who make their own can't get close to the size and light weight of a commercial suppressor. The science isn't that tough, it's the machine work and material that are hard to duplicate. Throw in the $200 tax stamp and associated paperwork costs and you're probably close to the price if you just buy one.