Hi! I'm the designer of the
DFRPG and the line developer of
GURPS. Here's my honest answer:
I'd recommend using fully general
GURPS for the experience you seek. It would be fair to say that the
DFRPG is a lot like the rules and supplements
GURPS provides for fantasy, except with most of the aspects you like dialed back to 1 or 2, while the
D&D-like parts are cranked up to 11. You
could, with considerable work, make the
DFRPG do what you want . . . but you'll keep running into missing pieces. The missing pieces – not just subtler magic systems (including ones that get away from spells and make magic inherent to races and items) and guidelines for creating nonhuman races (like your elves), but also non-adventuring crafts and professions (because to have swords, you need miners, smelters, smiths, and so on), socio-economic mechanics (for guilds, knights, monarchs, etc.), mass-combat rules (for large-scale warfare), and a thousand other things – are all in
GURPS.
If you already have the
DFRPG, this isn't a suggestion that you should toss it in the bin and go out and buy a ton of
GURPS materials! The
DFRPG is useful as a core. But you might want to consider posting in the
GURPS forum and asking what supplements provide the parts you want to add on.
Just a suggestion!