Weirdo
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If you want to increase its DR, increase its DR. The monster advancement rules are more a guideline to the GM.
Just keep in mind a significant increase will increase the CR above the normal increase for HD. DR 5/cold iron is probably fine for a creature with a CR in the 1-3 range (Like the Atomie, Grig, Dryad, Redcap, Leprechaun, or Dryad).