Are these your children or are you their teacher? Also, if you are their teacher, are you teaching only these two and how much time to you have to devote individually to them if not? I've never had a pull out program (or any other, for that matter) do that much individualization for my kids, but that sounds great if you can do it.

If you are going to compact the 1st & 2nd grade curriculum in most of the core subjects, is there a consideration of grade skipping them to 3rd after they complete 1st, then?

Sorry, I have more questions than answer right now, but I'm sure that we'll have more to offer when we know more what your role is and what the longer term options are!