DLR extension.. Parent exercising rights of access to child

[Dshyne]

I will like some advise pls regarding the quickest and cheapest way to ultimately get UK settlement.

I came to the uk from Nigeria on a 4year student visa in sept 2004, got married to a British national in aug 2006 just a month before my student visa was due to run out. I applied for spousal visa in person in aug 2008 and was granted 2yrs unfortunately marriage didn't work out.
In aug 2010 when spousal visa lapsed I filled form SET (O) applying for ILR as a Parent exercising rights of access to a child (British child from failed marriage to British national). I used the form at the time hoping the HO applying part 7 of the immigration rule will replace the 2 yrs under spousal visa with the one year period stated in paragraph 248D below
Indefinite leave to remain in the United Kingdom as a person exercising rights of access to a child resident in the United Kingdom.

248D. The requirements for indefinite leave to remain in the United Kingdom as a person exercising rights of access to a child resident in the United Kingdom are that:

(i) the applicant was admitted to the United Kingdom or granted leave to remain in the United Kingdom for a period of 12 months as a person exercising rights of access to a child and has completed a period of 12 months as a person exercising rights of access to a child
.
I was refused ILR at the time and granted 3 years DL till sept 2013 with no right of appeal. The letter stated I could apply for extension and would not normally be considered for settlement until I ve spent 6 years on DL.
I have a new partner now a British national and we ve lived together since dec 2011 and have a child together who will be one next month. My 3 years DL lapses at the end of this month and I'm just wondering what to do next..

Should I just apply for extension to DL using FLR(O)? Or
Try again for ILR using SET(O)?
I know I ll be eligible to apply for ILR under the 10 year rule next year as I ve never overstayed at any time since I first arrived in 2004 so I'm wondering if considering the whole of my circumstance I might stand a chance of ILR using a SET(O) now thereby saving time and money ultimately. I believe I have more than sufficient evidence to confirm I ve satisfied the conditions for the DL I was granted.
I will appreciate your views, comments and opinions.

Thanks

[Amber]

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