In San Marcos, there is a pretty sweet surf spot @ Rio Vista Dam. It is on the San Marcos River, right next to The River Pub; if you ask anyone in town (San Marcos, not Austin) they will be able to direct you there.
This is what you are thinking of, Groove.
San Marcos is 20-25 minutes south of Austin on I35.
If park and play isn't your thing, or you want to hit a few more rapids along a section of river - hit the Guad. The San Marcos is great, though. It is spring fed, 72 degree, clear water. Either way, you should check one, or both, of them out. They are both quite swell.