Almost correct. You set the CDI and HDG bug to the desired radial. Assuming you have full scale devaition, the autopilot will turn towards the desired course until a point where course error and devaition are equal and opposite - this is scaled in the autopilot to be 45 degrees. As you fly towards the radial and deviation diminishes, the NAV autopilot will go from NAV ARM to capture and the aircraft wil turn to the pre-set course.