My two cents: it sounds like your son is doing extremely well, but I too suggest holding off on the application.
First, there's a huge difference between early 5 and late 5 with the types of achievement portfolios you can submit. My DS was 5.1 when he was assessed at the same reading level (which jumped to grade 8.9 within 9 months), with matching math and spelling assessment, plus IQ scores well over the DYS benchmarks. Yet even with all those, YS asked for additional proof of his achievements. It was probably easy enough to do with videotapes, but we ended up waiting until we had further standardized national placement testing towards the end of K to finish our application. By then, he had accelerated so much further, and was able to do so much more like write full stories on his own, that it was much easier to submit.
I LOVE DYS, but I'm also not sure that it's absolutely necessary for you as you make your determinations for Kindergarten. In fact, we didn't even tell our K that we were applying to DYS because we wanted to forge that principal/teacher bond without looking like we were pushing an outside advocate on them right out the gate.
Even without DYS, we were given the option of skipping DS over K and into a 1st/2nd combo class. We opted not to, though, because K we felt K was a unique opportunity to enjoy the "cuteness" of being 5. Instead, the K teachers gave DS his own reading bin and several other independent learner accommodations to try and help stay at his level. ((Granted, it wasn't nearly enough, and we pulled DS at the end of that semester. Still, I'm glad he had the opportunity to just simply make memories of his K experience.))
I agree that K is the hardest decision. I would say that most of K is about learning social skills rather than the color/number/...that some of the kids are still working on. For our GT kids, those social skills can also be different than what they learned in preschool. My DS, for example, benefited from having to wait patiently for other children and respecting their turns even when he knew an answer. It also took him several weeks to learn not to finish his work on his own and start jumping to other pages ahead of the rest of the class. These seem silly, but the teachers reminded us that these are important to making independent learning work, esp. at higher levels. Most 5s, no matter how intelligent, can also benefit from the writing, crafts, and other fine motor that are stressed heavily in K.
Good luck with your decision making! We're going to have to go through that a 2nd time w/ our younger son, and already I'm not sure if we'll homeschool out the gate or place him in regular K just for the experience. He can already pass the K-academic-readiness tests, so by the time he's ready, it'll be another challenge.
Who would've thought K decisions would be so hard!!
So he happily counts dots and colors squares in math and does basic phonics. We'll have to see how it goes when he gets to first grade.