Thanks for the input Coldnavy. That is true in most cases, but after reading the instruction that feddoc posted, there's many variation to the O-1E rule. The one you stated Cold, is in Paragraph 1. As I read on Paragraph 5 applies to me. From the above link from feddoc, in section 010103, sub-section A, Paragraph 5, it states:
"5. Creditable Service for Certain Reserve Commissioned Officers. Effective January 1, 2002, commissioned officers in pay grades O-1, O-2, and O-3 who are paid from funds appropriated for Reserve personnel, and credited with 1,460 points for retirement computed under 10 U.S.C. 12732a(2) service as a warrant officer and/or enlisted member are entitled to the special rate of basic pay for pay grade O-1E, O-2E, or O-3E."
This allows any service member getting off active enlisted duty (providing they have completed exactly 4 yrs of service (which equals 1460 points) and is in a drilling status and being paid from Naval Reserve funds, is entitled to the O-1E through O-3E rank.