Short film camera advice needed?

Well I have a question actually, maybe you can help me out. A friend and I are planning to shoot a couple short films (5-8 min), problem is I own a Canon DC10 and we can get a flip camera. I know people often use a DSLR on film shoots for it's high def quality and the fact that it is travel sized compared to a those big jvc camcorders. Problem is we're on a small budget. So far I'm looking at $300 alone and I know that a lot of the investment comes from the lenses. So far I was thinking something along the lines of a Nikon D3100 if we wait a month or two more we can bump our investment to 400 or 500. Any recommendations within this price range?

If you want quality video, get a video camera. There are some excellent small camcorders, smaller than the D3100. A still camera will take great still shots but lousy video. Since my D5000 will not automatically focus in video mode, I doubt that the D3100 will either. Check on that before you buy.