I think we can all relate to how hard such decisions are when there is no absolute path to follow. I can't help noting Aeh's comments about the lack of norms on reading fluency for five year olds as most aren't reading yet. Your DD is not long turned five! Most kids starting school are five plus these days although that wasn't the case when I started school when there were lots of four year olds. So your DD is reading at level five at an age when lots of kids are not reading at all. And she may be doing it with more challenges than most kids if she has some retrieval fluency issues. So kudos to your DD. She is doing very well for her age.
If you redo kindergarten she will be with kids who are at the beginning of the learning process again. That isn't necessarily going to provide the atmosphere of challenge she is receiving now.
Like aeh I would err on the side of moving up to year one after next term and give her a chance to make more progress. It will give you a lot more information about her developmental growth in the context of her current peer group. You still have a quarter of the school year to go and kids can change quickly at this age. Try not to churn on the decision if possible. I know how that feels.
